of accounts receivable and goods in stocks of small firms in japan and also small relative to the outstanding balance in other advanced countries such as the united states. going forward, i expect this method to be utilized widely through active cooperation between financial institutions and firms. next i would like to introduce an attempt made mainly by regional financial institutions to send monozukuri or manufacturing instructors to small firms. “ competitiveness at worksites ”, or genbaryoku, of monozukuri proved effective in the process of rebuilding from the earthquake disaster. in order to boost the growth potential of japan ’ s economy by utilizing this strength, it is necessary to spread to other worksites the know - how of people who worked in the front - runner firms that lead the industry. also, it is important to pass on the advantages of genbaryoku to the next generation. with that in mind, some local governments and universities have been training as monozukuri instructors people in their 50 ’ s and 60 ’ s who have retired from manufacturing firms and sending those instructors to small firms to spread and pass on special techniques to others. in such a process, regional financial institutions play a major role. from the standpoint of small firms, some of them feel reluctant to accept instructors who have built up a long - term career in another firm. however, in cases bis central bankers ’ speeches where regional financial institutions match the right instructor and the right workplace using the trust between institutions and firms that they have been fostering every day, small firms tend to accept instructors much more easily. an example such as this has also been seen in shiga, kyoto ’ s neighboring prefecture. due to limited time, i have only touched upon two examples today. but i want to emphasize that, in either of the examples, not only industry, government, and academia but also financial institutions are collaborating and making efforts in their respective roles to boost the productivity and competitiveness of the region. i hope that such steady efforts, together with the accommodative financial environment, will support the enhancement of regions and industries, and consequently spread to japan ’ s economy as a whole. concluding remarks kyoto is a special place for me. i was born in tokyo, but during my childhood i often visited my uncle ’ s house in kamigamo, kyoto. he was chief librarian of the kyoto prefectural library at that time. the history and the culture that i saw and experienced at my visits have formed the basis of

s framework. let me share with you one example in which a new business in the lumber industry was established using a lending method called asset - based lending ( abl ). it has been pointed out for a long time that one of the structural problems of the lumber industry was a shortage of funds. there seem to be many firms that have abundant inventories of lumber but have a limitation in the amount of lumber that they can process and the amount that they can ship due to cash flow constraints. to deal with this problem, a project team, consisting of a regional financial institution, a furniture manufacturing firm, and a university ’ s laboratory, came up with an idea to use abl for establishing a new business. under abl, a financial institution will take receivables and movable properties that are closely tied to the firm ’ s business cash flow, such as accounts receivable and goods in stock, as collateral for a loan. this lending method, which finds value in corporate activities on their own terms, enables firms that do not own enough real or personal assets to raise the financial resources necessary to run their business. in order to raise funds through abl, there is a hurdle to clear. specifically, the financial institution that adopts this measure, in addition to making collateral assessment of say, accounts receivable and goods in stock upon extension of credit, needs to keep track of subsequent changes in their value in order to manage credit risk. the firm is required to provide this information regularly to the financial institution. in this way, both the financial institution and the firm incur costs in monitoring and providing information, and this is considered to be the crux of abl. but in this example, the project team treated the cherry wood used for furniture manufacturing as movable property and reduced such costs by attaching an ic tag to the wood to ensure traceability. this attempt has just started but it deserves attention in that a structural problem of an industry was solved by financial efforts. so far abl has tended to be perceived with a negative image as a lending facility for small firms with little real estate collateral and insufficient financial resources. as i have stated, however, abl is a lending facility that can be used for starting up a new business and project financing. if such understanding is more widely shared, abl has large potential to become a more popular facility without any negative image. the outstanding balance in the japanese abl market is still very limited compared to the total size