4 mpm, the bank decided to temporarily suspend the so - called banknote principle until it achieved the price stability target. however, it is not necessary to repudiate the underlying concept of the principle that the amount of banknotes in circulation – namely, the bank ’ s long - term liabilities – should be backed by the purchasing of jgbs – that is, longterm assets. i understand that the bank should resume the purchases in line with the banknote principle in the future. in order to prevent concerns over fiscal dominance from arising following the temporary suspension of the banknote principle, it is important for the government to ensure the market credibility of its stance toward achieving fiscal consolidation. in this regard, in the joint statement by the government and the bank released in january, it is clearly stated that, in strengthening coordination between the government and the bank, the government would steadily promote measures aimed at establishing a sustainable fiscal structure with a view to ensuring the credibility of fiscal management. i strongly expect that such efforts will make steady progress. 8. summary of recent policy decisions the decisions made at the april 3 – 4 mpm have great significance. under the framework of “ comprehensive monetary easing, ” which had been adopted for the past two and a half years, the bank had been strengthening monetary easing through various unconventional measures while examining the effects of such easing. this has contributed to underpinning japan ’ s economy, but the economy has failed to exit from a period of deflation. bis central bankers ’ speeches it should be noted that, because of this experience of the comprehensive monetary easing, the bank could decide on a new policy of the quantitative and qualitative monetary easing at the april 3 – 4 mpm. it is true that the decision, which includes the purchases of jgbs on such an unprecedented scale, entails a certain degree of risk, but i am sure that this will produce effects that would more than offset such a risk. the bank will strongly pursue the quantitative and qualitative monetary easing in order to achieve the price stability target of 2 percent at the earliest possible time, with a time horizon of about two years. at the same time, if regulatory and institutional reforms as well as economic growth policies implemented by the government make progress and the growth potential of the private sector increases, this will further enhance the effects of the quantitative and qualitative monetary easing. initiatives in such areas are steadily being undertaken, and i have great expectations that further progress will be made

luis de guindos : the euro area economy and our monetary policy stance remarks by mr luis de guindos, vice - president of the european central bank, at the business leadership forum, organised by ie university, madrid, 30 october 2023. * * * recent economic developments the euro area economy remains weak. 1 foreign demand is subdued and tighter financing conditions are increasingly weighing on investment and consumer spending. the services sector is also losing steam, with weaker industrial activity spilling over to other sectors, and the impact of higher interest rates is broadening. recent indicators point to continued weakness in the near term. the labour market has been a bright spot supporting the euro area economy and has, so far, remained resilient to the slowdown in growth. but there are signs that it is turning. while unemployment stood at 6. 4 % in august, the lowest level recorded since the start of the euro, fewer new jobs are being created, including in services, which suggests that the cooling of the economy is gradually feeding through to employment. moreover, the risks to the growth outlook are tilted to the downside. growth could be lower if the effects of monetary policy transmission turn out stronger than expected, or if the world economy weakens further. furthermore, major geopolitical risks have intensified and are clouding the outlook. this may result in firms and households becoming less confident and more uncertain about the future, and dampen growth further. at the same time, while remaining significantly above our medium - term target of 2 %, recent inflation data have been in line with our expectations, confirming that our monetary policy is working. inflation dropped sharply to 4. 3 % in september and the fall was visible in all its major components. food price inflation decreased again, but – at 8. 8 % – remains high by historical standards. energy prices fell by 4. 6 %, but have risen again more recently, and have become less predictable in view of the new geopolitical tensions. inflation excluding energy and food also dropped to 4. 5 % in september, and we see continued declines in measures of underlying inflation. however, domestic inflation remains strong owing to the growing importance of wage pressures. the inflation outlook remains surrounded by significant uncertainty. in particular, heightened geopolitical tensions could drive up energy prices and higher than anticipated increases in wages could drive inflation higher. by contrast, a stronger transmission of monetary policy or a worsening of the global economic environment would ease price pressures. longer - term interest