operations lengthened, running for ten months in bill - purchase operations at the final stage of the quantitative easing policy. “ quantitative easing ” is often used in a rather vague manner, but the policy action we adopted can be regarded as a pure form of “ quantitative easing. ” third, the bank adopted “ credit easing ” in the current terminology. the assets purchased included asset - backed securities ( abss ) and asset - backed commercial papers ( abcps ). fourth, the bank made a commitment to continuing with the zero interest rate policy and the quantitative easing policy. the conditions for commitment were expressed as “ until deflationary concerns are dispelled ” at the time of the zero interest rate policy and “ until core cpi inflation becomes stably zero or above ” at the time of the quantitative easing policy. fifth, the bank took unprecedented measures to secure the stability of the financial system, including purchases of stocks held by financial institutions. you may find the striking similarities between the policy measures formerly taken by the bank of japan and those currently taken by central banks in major countries. i never imagined that a host of unconventional measures taken by the bank of japan would be adopted by other central banks just a few years later. i also guess that my colleagues at central banks in other countries never imagined employing such policy measures. of course, such measures are not perfectly identical, reflecting the differences in the structure of financial intermediation and severity of stress in financial markets, as well as the differences in legal and social restrictions on policy measures available for central banks. notwithstanding such differences, the aforementioned striking similarities stand out. it is quite natural that a central bank facing a financial crisis takes similar measures, because a central bank, after all, pursues the same objectives with the same capacity, that is, the capacity to adjust the amount of liquidity in the economy. 3 among the papers contributed to the conference, goodfriend ( 2009 ) argues central banking under financial turmoil by classifying central bank initiatives into monetary policy, credit policy, and interest rate policy. importance of liquidity this leads me to discussing liquidity, which, i think, is the most important concept in understanding the current financial crisis, though it is hardly possible to sort out a single factor. during the expansion period of the credit bubble, it was complacency based on unfounded expectations about the unlimited availability of liquidity behind the aggressive risktaking attitude. by contrast, during the period of bubble bursting, it was fear of the

haruhiko kuroda : monetary policy – its effects and implementation opening remarks by mr haruhiko kuroda, governor of the bank of japan, at the 2015 bojimes conference, hosted by the institute for monetary and economic studies, bank of japan, tokyo, 4 june 2015. * i. * * introduction good morning, ladies and gentlemen. it is my great honor to say a few words at the beginning of the 22nd boj - imes conference. on behalf of my colleagues at the bank of japan and myself, i would like to express my sincere welcome to all of you. at last year ’ s conference titled “ monetary policy in a post - financial crisis era, ” we had active discussions on fundamental issues of monetary policy during the period of slow economic growth following the global financial crisis. since then, there has been further progress in research on the effects of unconventional monetary policy in academic and central bank circles. besides, growing attention has been paid to renewed debate over the slow recovery after the financial crisis, as represented by the thesis of secular stagnation. against the backdrop of these factors, we have selected “ monetary policy : its effects and implementation ” as the theme of this year ’ s conference. the aim is not only to keep monetary policy at the center of the discussion, but also to put greater emphasis on implications for policy conduct in practice. i hope that, in light of the progress in monetary policy research and the recent developments in the global economy, we will have frank and lively discussions on the monetary policy challenges that we central bankers currently face. to kick things off, i would like to raise some issues relevant to these challenges. ii. global economic conditions and current issues concerning the conduct of monetary policy over the past year, the global economy as a whole has been recovering moderately. however, we have observed considerable differences in developments of economic activity and prices among countries and regions. in reflection of these differences, diverging directions of monetary policy among the united states, europe, and japan have become increasingly apparent. this certainly was a major feature of monetary policy in the global context for the past year. meanwhile, headline inflation rates dropped globally, due primarily to a plunge in crude oil prices. with these significant developments in mind, i would like to raise three current issues concerning the conduct of monetary policy. the first issue concerns the effects of unconventional monetary policy and its transmission channels. in terms of monetary policy implementation, the european central bank launched the expanded asset purchase programme