third risk comes from political factors. in addition to brexit and political uncertainties in europe, political destabilization due to increasing income inequality could affect the global economy through a decline in confidence and instability in financial and capital markets. the fourth risk is vulnerability arising from accumulated debt in the private and public sectors. the accumulation of public debt is the result of an increase in public expenditure after the lehman shock and rising social security payments. there is no doubt that such expenditures have had a positive impact on the economy. however, securing long - term fiscal sustainability is a precondition for maintaining economic stability. while accumulated private debt may be the result of positive investment, such as corporate and housing investment, it does increase the financial vulnerability of firms and households, making them susceptible to changes in interest rates and financial market conditions. we therefore need to be vigilant about such risks. at each g20 meeting, we share our understanding on global economic conditions and associated risks, and we discuss the necessary policy measures. of course, the global economy is changing continuously. in the run - up to the june g20 meeting in fukuoka, we will remain vigilant about these changes, while gathering all the necessary information. as president of the g20, we will lead policy discussions at the meeting with all the relevant information and appropriate evaluations of global economic conditions. ii. global imbalances among the g20 policy agendas, let me focus on two medium - to long - term issues : global imbalances and international financial architecture. first, on global imbalances. although the issue has long been a topic for discussion at g20 meetings, we have had limited opportunity in the recent past to discuss it in great depth. we have therefore decided to put the issue on the table of g20 meetings again this year. we will analyze the trend and background of global imbalances and discuss the appropriate policy actions. looking back on the global trend before the lehman shock, we saw excess consumption and investment on the back of soaring asset prices in the united states, and an expansion in current account deficit as the mirror image of these domestic excesses. on the other hand, emerging economies took a cautious approach to investment, partly because of the trauma of past balance - of - payment crises, and as a result, their current account surplus accumulated. when asset prices plunged and domestic demand shrank in the united states, the savinginvestment balance subsequently recovered. the expanding trend of u.

and expand the economy. the bank ’ s determined commitment toward overcoming deflation and sustainable economic growth japan has been mired in deflation for more than 15 years. for japan to achieve sustainable economic growth in the future, the utmost priority is to overcome deflation at the earliest possible time. in order to indicate its unwavering will to attain this target, the bank decided to introduce “ qqe with a negative interest rate. ” japan ’ s economy has steadily progressed toward overcoming deflation for the past three years after the introduction of qqe, but we are only halfway to achieving the price stability target. meanwhile, the bank has devised the framework of monetary policy in various ways so as to adjust to economic and financial developments. related to this point, i will touch on the supplementary measures decided at the monetary policy meeting in december 2015 to facilitate smooth implementation of qqe. specifically, we took the measures of ( 1 ) expanding eligible collateral for the bank ’ s provision of credit and ( 2 ) extending the average remaining maturity of jgb purchases. as for the expansion of eligible collateral, as the bank continues its massive purchases of jgbs, the amount of eligible collateral of private financial institutions has been on the decrease. expanding the range of eligible collateral will contribute to smooth asset purchases in the future. as for the extension of the average remaining maturity of jgb purchases, it aims at more flexible and smooth asset purchases while assuring liquidity in the jgb markets. as is indicated by these measures, not only “ a negative interest rate ” but additional monetary easing in terms of “ quantity ” and “ quality ” dimensions will naturally remain a policy option. i am convinced that this new policy framework will be a drastic measure to fulfill the bank ’ s responsibility to overcome deflation. raising growth potential of japan ’ s economy and monetary policy in order to achieve sustainable economic growth, japan ’ s economy inevitably should tackle the challenges to raising medium - term growth potential, on top of overcoming deflation. as i have noted, the potential growth rate in japan is estimated to have declined to around 0. 5 percent or lower. taking a shrinking population as a given, an overall increase in labor productivity will be a key to raising the potential growth rate. in this sense, looking ahead, a bis central bankers ’ speeches structural reform needs to be promoted not only in an economic context but also in a social context, and should focus on developing a productivity - enhancing mechanism and environment. i strongly