- ante prevention and another emphasizing the importance of ex - post measures to resolve the situation in the aftermath. following the global financial crisis, however, all now appear to agree that the cost of a bubble bursting is unbearably enormous. most past bubbles were formed while economies enjoyed low inflation rates. focusing obsessively on the short - term stability of the consumer price index as a way to ensure economic stability will actually have see the following comments. bernanke, ben s., testimony at the joint economic committee, u. s. congress, october 4, 2011 : “ monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the u. s. economy ”. draghi, mario, interview with the financial times, december 14, 2011 : “ monetary policy cannot do everything ”. this comment was made at the press conference on november 16, 2011 after presenting the inflation report. bis central bankers ’ speeches the opposite effect of increasing instability. needless to say, bubbles are not caused by low interest rates alone. however, when the expectation prevails that low interest rates will continue for a long period of time, it is likely to encourage leverage and maturity mismatching between the assets and liabilities of financial institutions. in that sense, i believe that in the conduct of monetary policy central banks also need to be attentive to the accumulation of financial imbalances. my final point concerns the regulatory and supervisory framework. looking back at how bubbles are formed, the bottom line is that it comes down to aggressive activity by both borrowers and lenders. financial institutions ’ activities are influenced not only by the expectation that a stable environment will continue but also by incentives created by the regulatory and supervisory framework. as for the background to such aggressive activities by financial institutions, almost without exception regulation and supervision did not prevent them from getting involved in risky lending, which was, in retrospect, an attempt to improve their low profitability. this was the case in the japanese bubble period and european financial institutions did the same thing during the formation of the global credit bubble in the middle of the 2000s. central banks and the regulatory and supervisory authorities in individual jurisdictions are currently working to reform the regulatory and supervisory frameworks. one important issue in this regard is how to find the right balance between two important tasks : restraining excessive risk taking and securing the profitability of financial institutions. closing words the recent financial crisis has certainly left not

was launched as a forum in which central banks and financial regulators discuss how to respond to climate change. the bank joined the ngfs in 2019 and has participated in discussions on the effects of climate change on economic activity and the financial system. in 2020, the ngfs published its first set of climate scenarios, based on the idea that using scenario analysis is effective in assessing climate - related risks to the financial system. a number of central banks and financial regulators are currently conducting analyses of the financial system using the ngfs scenarios. the group of seven ( g7 ) and the group of twenty ( g20 ) have also been discussing climate change as a main issue. specifically, there are discussions on the need to promote firms ’ financial disclosures based on the tcfd recommendations and the importance of scenariobased financial system analysis. the effects of climate change have also been discussed at the executives ’ meeting of east asia - pacific central banks ( emeap ). asia accounts for about half of global carbon dioxide emissions and is also the region most vulnerable to the negative effects of climate change, such as floods. for this reason, asian policymakers are showing particular interest in the responses to climate change. individual central banks have also been stepping up their efforts. the bank of england has been conducting scenario analysis that quantitatively assesses the impact of climate change on the financial system. since 2020, it has also been publishing its own climate - related financial disclosure in line with the tcfd recommendations. furthermore, the bank of england has been considering how to “ green ” the corporate bond purchase scheme ( cbps ), one of its monetary policy measures. the european central bank has been conducting scenario analysis covering financial institutions in the euro area and published its overview this year. it has also decided on a comprehensive action plan to further incorporate climate change considerations into its policy framework, based on its recently completed monetary policy strategy review. this year, the federal reserve board set up two committees to assess the effects of climate change on financial institutions and the financial system, one from a microprudential perspective, the other from a macroprudential perspective. these initiatives show there has been a global response in recent years to the challenges of climate change, both at the level of international forums and organizations, and at the level of individual central banks. 2 / 6 bis central bankers'speeches iii. central bank ’ s mandate and market neutrality as the central bank of japan, the bank has been actively engaging in these international discussions