the underlying trend in inflation – through, for example, efforts by the government and firms – and that a considerable period of time will be required for this to take place. therefore, rather than aiming to achieve the 2 percent price stability target through monetary policy alone in the short term, i believe that resetting the time frame for achieving the target to the medium to long term and conducting monetary policy in a flexible manner – coupled with an improvement in communication with financial markets – will lead to maintaining economic and financial market stability. this will result in reaching the bank ’ s ultimate goal of contributing to the sound development of the national economy. bis central bankers ’ speeches

##qe – including a reduction in the pace of the bank ’ s asset purchases – and a review of the negative interest rate policy, based on an examination and a comparison of positive effects and side effects of these measures. furthermore, i think that enhancement of facilities to provide liquidity is important, in order to maintain financial system stability through securing the smooth functioning of financial markets and financial intermediation. i would like to explain the organization of the thinking behind my policy stance. a. rebalancing of two mandates of the bank ’ s policy the two mandates of the bank ’ s policy are to ensure price stability and financial system stability. monetary easing measures in recent years – such as qqe and the negative interest rate policy – have proceeded with emphasis placed on price stability, based on the recognition that financial system stability has been sufficiently secured. i admit that the financial system can be assessed as being generally stable at present. however, potential vulnerability in the financial system has increased under the prolonged bis central bankers ’ speeches low - interest rate environment, and this trend has been augmented by the large - scale monetary easing. therefore, i think that the outlook is by no means optimistic. from this viewpoint, i have continued to cast a dissenting vote on the negative interest rate policy since its introduction through the most recent mpm held in june 2016. i have considered that negative interest rates would decrease the functioning of financial markets and financial intermediation, as well as impair the stability of the jgb market and smooth conduct of the bank ’ s jgb purchases, and therefore an interest rate of 0. 1 percent – the same rate as before – should be applied to all current account balances excluding the amount outstanding of the required reserves held by financial institutions at the bank. moreover, i think it is time for the bank to shift the focus of its policy from price stability to financial system stability. i believe that such a shift will eventually benefit the bank in pursuing the ultimate goal of contributing to the sound development of the national economy through achieving the intermediate objectives, i. e., the bank ’ s two mandates, in a wellbalanced manner. b. necessity to maintain the sound functioning of financial intermediation in recent years, financial institutions ’ profitability – represented by operating profits from core business – and loss - absorbing capacity have been declining, particularly among regional financial institutions. downward pressure on their net income also seems to have increased recently, due in part to the fact that profit taking