, i have expressed my views under the theme of public policy study and monetary policy management by incorporating my own experiences and providing examples of what is actually happening recently on the economic policy front. as mentioned at the outset of my speech, in economic policy, academic knowledge and practical knowledge are close or even inseparable, and public policy study that bridges the two has become extremely important. this situation is common in any country, and as interrelationships among countries ’ economic policies have been deepening, there is no doubt that the global network has increased its importance. therefore, it is expected that each country ’ s graduate schools of public policy will promote public policy study through an expansion of joint studies and exchanges between professors and between students. from a central bank ’ s perspective, i have great expectations for properly managing monetary policy by thoroughly utilizing the fruits of such studies. at present, there are not many economic papers that get a hit when doing an internet search with the keywords “ quantitative and qualitative monetary easing ( qqe ). ” however, a few years from now, the experience of japan and the bank of japan may have provided a new chapter for economics and public policy study. and i cannot help but expect that a theory worked out then will be one of the powerful weapons that central banks can use in the future to combat deflation. thank you for your attention. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

s commitment to continue with this provision of ample liquidity until the year - on - year rate of change in the cpi ( excluding fresh food, on a nationwide basis ) registers zero percent or higher on a sustainable basis. this commitment is unprecedented as central bank monetary policy, but stipulating the conditions beforehand has made it possible for market participants to act based on the commitment and that has contributed to boosting the transparency and effectiveness of monetary policy. reviewing the subsequent policy effects, when there were strong concerns about financial system stability, the provision of ample liquidity by the bank, which met financial institutions'liquidity demand, stabilized financial markets and maintained accommodative financial conditions, and contributed to averting a contraction in economic activity. in financial markets, the bank's provision of ample liquidity pushed short - term interest rates down to practically zero percent. longer - term interest rates have remained stably at low levels, because the commitment by the bank has led the market to expect that the short - term interest rates will remain at zero percent when prices continue to decline. now that concerns about financial system stability have subsided substantially and prices are beginning to rise, the commitment is losing its influence on the formation of longer - term interest rates. thus, the effects of the quantitative easing policy are coinciding with the effects of short - term interest rates being at practically zero percent. after the quantitative easing policy is maintained in accordance with the commitment, future monetary policy will follow the path of the processes of " reducing the outstanding balance of current accounts toward a level in line with required reserves, " " maintaining very low interest rates, " and " gradually adjusting interest rates to a level consistent with economic activity and price developments. " in explicating these processes in somewhat greater detail, with respect to the timing for changing the quantitative easing policy framework, the bank will judge whether the year - on - year rate of change in the cpi registers zero percent or higher on a sustainable basis in accordance with the commitment. assuming that developments follow the projection described in the outlook report, the possibility of meeting the conditions of the commitment and of departing from the present monetary policy framework is likely to increase over the course of fiscal 2006. in reducing the outstanding balance of current accounts, the bank will need to monitor financial market conditions carefully, because the outstanding balance of current accounts at the bank has been exceeding substantially the amount of required reserves for a long period of time. up to this point, the outstanding balance of current accounts