can be partly attributed to the bank ’ s highly stimulative monetary policy, which i touched upon earlier. shifting our focus to the second stage of the transmission of monetary policy, unfortunately even an extremely accommodative financial environment has not led to an active increase in investment and spending by private economic agents. this is in fact a prime source of concern for the bank as well as japan ’ s economy. as a response to this situation, some believe that economic activity would eventually be stimulated if the bank took further drastic measures. in reality, however, interest rates in japan, particularly actual funding rates for private economic agents, have continued to ease and are the lowest among advanced economies. as for quantitative indicators, the monetary base – funds provided by the central bank – and money stock – funds possessed by households and firms – relative to nominal gdp indicate that the amount of fund provision in japan is the largest among advanced economies, far exceeding the amounts in the united states and the euro area ( chart 8 ). while the united states substantially increased its amount of fund provision after the lehman shock, japan conducted such aggressive fundprovisioning at an earlier stage given that it experienced a financial crisis at an earlier stage. this may explain why the bank ’ s active efforts may not be so noticeable. nonetheless, the hard fact based on data is that japan ’ s monetary base relative to nominal gdp already bis central bankers ’ speeches attained in 2002 the level currently reached by that of the united states, and has been rising further over the past several years. although the bank continues to enhance monetary easing, given the accommodative financial environment surrounding japan that i have described, it is more important to make efforts to take advantage of such conditions – namely, efforts aimed at strengthening the economy ’ s growth potential. i will discuss this in more detail later, but before that let me turn to the effect of and responses to the yen ’ s appreciation, which is closely connected to this issue and is considered a matter of grave concern among people in this region. iii. responses to the yen ’ s appreciation regardless of whether a currency is appreciating or depreciating, the impact of foreign exchange rate fluctuations is highly significant for business, for local economies where businesses cluster, and for the national economy as a whole. looking back, the yen was on a significant depreciation trend toward the middle of the 2000s, which was followed by a period of significant appreciation. the current appreciation of the yen

klaas knot : a solid foundation for a resilient structure speech by mr klaas knot, chair of the financial stability board and president of the netherlands bank, at the central bank of ireland's macroprudential policy for investment funds conference, dublin, 20 may 2024. * * * good afternoon. it is great to be back in dublin in this impressive building of the central bank of ireland. the dutch central bank will be moving into its renovated headquarters in december, so i can't help paying attention to my architectural environment. but that's not the only reason. the way architects look at the foundation and resilience of their buildings resembles the way the financial stability board ( fsb ) looks at the financial system. a structure, after all, is only as strong as its weakest point. 15 years ago, the global financial system was on the verge of collapse. there were, in fact, many weak points. but, we know that non - banks, including investment funds, played a role in that global financial crisis1. more recently, there was the march 2020 turmoil2, and indeed other incidents, such as the failure of archegos and the ldi turmoil. these events have been further reminders of one simple fact : there remain key vulnerabilities within nbfi. the basic regulatory structure is not strong enough. in recent years, the fsb and the international standard - setting bodies have been working hard to address these nbfi vulnerabilities. we have made progress, but there is still more to do. just like this fantastic building, we are aiming to construct something that can stand the test of time. something that functions well through hot spells and big storms. for a resilient structure we need a solid regulatory foundation. then, macroprudential measures could be added to the design to further support the structure, where needed. measures that may change over time and could differ from one jurisdiction to the next. measures that are complements to, but not substitutes for, the baseline set of regulations. therefore, to me, a successful macroprudential approach depends on the completion and proper implementation of the international regulations the fsb has been developing. in the remainder of this speech, i will discuss in more detail the fsb's recent work in the area of investment funds and nbfi more broadly. i will then offer some thoughts on the next steps at the international level towards a