##provisioning under the stimulating bank lending facility is about 5 trillion yen as of end2013. based on the assumption that the growth rate of bank lending and the utilization rate of the facility will remain more or less at current levels, the amount outstanding of fundprovisioning under the enhanced framework is estimated to be around 30 trillion yen. i will now move on to the growth - supporting funding facility, which aims to support the flow of funds to growth sectors. with this facility, the bank provides long - term funds – both yendominated and foreign currency - denominated – at a low interest rate to financial institutions for their lending and investment to areas that are expected to contribute to strengthening japan ’ s growth potential, such as medical and nursing care ; environment and energy ; agriculture, forestry, and fisheries ; and tourism. before the enhancements, the bank set the maximum amount of its fund - provisioning to financial institutions under the main rules and special rules as follows : 3. 5 trillion yen under the main rules for financial institutions ’ investments and loans amounting to 10 million yen or more ; 500 billion yen under the special rules for financial institutions ’ equity investments and asset - based lending ( abl ) – the latter bis central bankers ’ speeches of which uses assets such as accounts receivable and inventories as eligible collateral ; 500 billion yen under the special rules for financial institutions ’ small - lot investments and loans ; and 12 billion u. s. dollars – equivalent to 1. 2 trillion yen – under the special rules for a u. s. dollar lending arrangement using the u. s. dollar reserves already held by the bank. in the recent enhancement of the facility, the policy board decided to double the maximum amount of the bank ’ s fund - provisioning under the main rules, which had almost reached its limit, to 7 trillion yen, and increased the maximum amount of its fund - provisioning to each financial institution from 150 billion yen to 1 trillion yen. it was decided that the duration of all loans – excluding those made under the u. s. dollar lending arrangement – would be extended from the former period of one to two years with a fixed interest rate of 0. 1 percent per annum to four years with a fixed rate of 0. 1 percent per annum. in order to maintain the virtuous cycle, it is important that firms and households actually make use of the accommodative financial conditions for funding and increase investment and spending, which in turn will

in mind two key transmission channels, that is, routes by which the effects of qqe are expected to carry through the economy : ( 1 ) lowering real interest rates by exerting downward pressure on nominal long - term interest rates and raising inflation expectations ; and ( 2 ) the portfolio rebalancing effect. in lowering real interest rates, the bank first applies strong downward pressure on nominal long - term rates by tightening jgb market conditions through the massive purchases of jgbs. then, through a clear explanation of its determination to achieve the price stability target at the earliest possible time and the continuation of massive purchases of assets underpinning this determination, it aims to raise inflation expectations by boosting people ’ s expectations that the economy will become revitalized. consequently, real interest rates could be lowered if the extent of a pickup in nominal rates is contained within the extent of a rise in inflation expectations. as the spending behavior of firms and households is influenced by real interest rates, a decline in such rates would help to increase firms ’ and households ’ investment and consumption. as for recent developments, in a situation where nominal long - term interest rates have been stable at low levels, real interest rates appear to be on a declining trend on the back of a rise in inflation expectations as a whole. real interest rates are expected to continue on a declining trend given that the bank ’ s large - scale jgb purchases will put strong downward pressure on nominal long - term rates and as inflation expectations rise in line with an increase in the actual inflation rate. next, the portfolio rebalancing effect can be described as the effect produced by the bank ’ s asset purchases, in which they encourage financial institutions and institutional investors to shift their asset portfolio toward lending and investment in risk assets such as stocks. the aggregate flow of investment – including by households – confirms that investments in stocks and investment trusts as well as in corporate bonds, in addition to lending, have been increasing, while the amount of jgb holdings has been decreasing. the increases are partly attributable to the rise in stock prices, and the increase in the amount of lending is still small compared with that of the monetary base. nevertheless, portfolio rebalancing – mainly characterized by the shift in investment to risk assets – is likely to gradually gather momentum as firms ’ demand for funds continues to strengthen and given that business fixed investment is expected to continue on a moderate increasing trend. with these channels acting together, it is likely that the