of the future level of the total size of the program – the total size of the program will be increased to 101 trillion yen by end - 2013 from 65 trillion yen at end - 2012, as had been planned earlier. from january 2014 and for some time, the bank will purchase about 13 trillion yen in financial assets, including about 2 trillion yen of jgbs, every month without setting any termination date. b. the bank ’ s price stability target and its importance next, i would like to discuss in more detail the inflation targeting system, looking at examples of overseas systems. article 2 of the bank of japan act stipulates that “ currency and monetary control by the bank of japan shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy. ” this tells us that achieving price stability is the precondition for the sound development of the national economy and that the sound development of the national economy – which deeply impacts public welfare – is the ultimate target of the monetary policy conduct. based on this thinking, in policy conduct bis central bankers ’ speeches aimed at achieving the price stability target, it is most important to aim at contributing to the stability and development of the economy in the medium to long term, and to carefully conduct policy while monitoring the soundness of the financial system. at the same time, it must be noted that policy conduct aimed at guiding the inflation rate to the target in an automatic manner in fact entails the risk of hampering medium - to long - term economic stability. c. flexible inflation targeting system the introduction of an inflation target by the reserve bank of new zealand in 1988 was a first among the central banks of the major economies, followed by the central banks of canada and the united kingdom. in new zealand, the central bank aimed at the target rigidly in the beginning, but later it was recognized that this rigidity was destabilizing the economy. for this reason, the introduction of an inflation target was deferred by the central banks of japan, the united states, and other major economies in europe. subsequently, however, central banks adopting an inflation target have made adjustments to boost flexibility. many of the central banks have not specified the timing for achieving the target. even the bank of canada – which specified the term for achieving the target as “ typically within a horizon of six to eight quarters ” – allows adjustments in the length of the term depending on developments in economic activity and prices to ensure the target ’ s flexibility

way that also serves the interests of the stakeholders. the board and senior management of the supervised institutions are expected to promote and demonstrate an organizational culture that expects integrity from its employees in conducting the institution ’ s business and for ensuring a sound and prudent approach to risk identification and management. the bank also emphasizes that the responsibility of an bis central bankers ’ speeches institution ’ s board and management is to ensure that the institution meets prudential and statutory requirements and has management practices to limit risks to prudent levels. key statistics since the reform, there have been positive results over the last few years compared to the bad experiences some 13 years ago where contributors lost a lot of their savings. prudent and good management and good corporate governance framework are enabling factors to the positive results that we see today. the way ahead in anticipation of lifting the performance of the financial system as a whole, there are several challenges we face at the central bank. these are : • constantly enhancing our supervisory responsibilities as a result of global financial developments including the recent global financial crisis and other external factors. this includes allocating adequate resources to undertake prudential reviews, provision of technical training and other manpower developments ; • introduction of new prudential standards covering best practices on good governance ; • revision of existing prudential standards to align with best practices but in a png context ; • financial crime – improving ways of dealing with perpetrators of money schemes, financial fraud and theft, proceeds of crime ; • financial inclusion – how to get the un - banked portion of our population into the formal financial system ; • financial awareness and literacy – to educate the populace on financial matters and awareness against fast money scams ; • payment system – improvements to instruments and settlements to ensure a safe, cost - effective and efficient payments system. the bank is prepared to deal with these challenges to ensure that our supervision results in a sound and prudently managed financial system in png as experienced to date. with these remarks, i would like to again say thank you to pngid for hosting the workshop and for mr. john mendzela in conducting this workshop and for all of you who attended today to take a day of from your busy schedule not only to refresh your mind, but to learn about the best practises in implementing good corporate governance. i hope that what you all have learnt during this workshop has been valuable and you would take some important lessons from the workshop to be utilised in your respective institutions. thank