the private sector is estimated to have risen by about two years to around 61. working life will have to be extended, partly to guarantee an adequate standard of living to the older people of tomorrow. the countries in europe with the highest employment rate in the 55 – 64 age group are also those with the highest youth employment. in 2009 the government took an important step by automatically establishing a link, from 2015, between the minimum retirement age and changes in life expectancy ; a regulation now being drafted will implement this provision. actions on the so - called retirement “ windows ” and on regulations for women employed in the public sector move in the same direction. inps has launched initiatives to give better information to workers about their personal pension position. the process of pension system reform could be completed by measures that gradually standardize the retirement age among different groups of workers, speed up adjustments to the transformation coefficients of the contributions - based system, and provide greater retirement flexibility. banks, supervision lending to firms declined by 3. 7 per cent on an annual basis between september and december 2009. in 2010 the pace of the contraction eased and in the three months ending in april came to 1 per cent. the sharpest decline has been in northern italy, where industrial activity is most intensive ; lending to firms in the south has begun to grow again. credit to households has continued to expand, albeit slowly. last year ’ s credit contraction largely reflected the weakness of demand for loans, but there were also supply - side tensions. according to the eurosystem ’ s bank lending survey, these gradually eased from mid - 2009 onwards. we recently conducted the survey at regional level, expanding the sample ; the results indicate improving supply conditions in the early months of this year in the north - west and the south. in italy, as in other countries, the quality of bank loans deteriorates during recession. in 2009 the loan losses of our five largest banking groups absorbed almost 70 per cent of their operating results ; their profits fell by over a fifth. the trend, though moderating in early 2010, has continued and is affecting smaller lenders too, who were less badly hit in the early stages of the crisis. with the onset of the greek crisis, acute liquidity strains in the interbank market have returned after subsiding last year. transactions are mostly very short term. there is a large share of collateralized contracts, a tendency to deal with domestic counterparties and frequent recourse to bilateral trades. banks must be prepared

growth. first, favorable demographics ( slide 3 ). total population increased at an annual rate of + 1 % during this period and the relative youth of the working - age population supported both production and consumption. at the beginning of the economic boom period, the farming population reached approximately 40 % of the total population and the migration of surplus labor from the rural areas to the cities enabled the rapid growth of a high productivity manufacturing sector. second, the use of competitive forces. it is sometimes pointed out that the government ’ s industrial policy or so - called “ japan incorporated ” was the key factor behind japan ’ s economic miracle. i believe such public sector influence is overstated. when we look at the the conference was held on may 5th and 6th under the theme, “ monetary policy under resource mobility ”. please refer to, http : / / www. suomenpankki. fi / en / tutkimus / konferenssit / tulevat _ konferenssit / pages / bof200 _ 2011. aspx bis central bankers ’ speeches history of japan ’ s leading firms, it is not rare to find cases where they entered into new areas dissenting against the government ’ s industrial policy or cases where they did not receive any favorable treatment. there are also examples where industries and firms which were wellprotected gradually lost their vibrancy. strong competition supported japan ’ s high - growth period by stimulating entrepreneurship and promoting technological innovation which enabled japanese firms to catch - up with those in advanced economies. third, the benefits of global free trade. when one looks at the contribution of individual components to gdp growth, domestic demand is by far the main factor ( slide 4 ). however, this does not refute the important role that the overseas economy played. japan produced large amounts of producer and consumer goods for the expanding global market, such as steel, electronic appliances and automobiles. the foreign exchange obtained through exports was used to import raw materials necessary to support domestic economic development. the basic condition which made such a growth model possible was the continued growth of the world economy and the maintenance of the global free trade system. the bubble and its collapse japan ’ s high - growth period ended in the early 1970s and the pace of growth gradually slowed. however, during the 70s and 80s, japan still maintained a relatively high - growth rate when compared with other major advanced economies ( slide 5 ). favorable demographics and strong global competitiveness were the basic components which continued to