likely to moderate, mainly as a result of the increase in public investment. nonetheless, distinct narrowing in the output gap is hardly expected for the time being as private demand remains sluggish. furthermore, the continued decline in wages and the appreciation of the yen since early autumn are likely to exert downward pressure on prices. hence, the decline in prices, especially in wholesale prices, may somewhat accelerate in the future. this report was written based on data and information available when the bank of japan monetary policy meeting was held on december 15, 1998. the bank ’ s view on recent economic and financial developments, determined by the policy board at the monetary policy meeting held on december 15, as the basis of monetary policy decisions. turning to the financial markets, japanese banks are successfully raising foreign currency funds necessary to cover a huge shortage at the year - end. reflecting this, the japan premium and euroyen rates have peaked out, and the market ’ s anxiety, which had previously intensified, is gradually settling down. in the meantime, market interest rates on instruments maturing after the fiscal year - end ( march 1999 ) are on an upward trend, suggesting continued concern of market participants over liquidity risk. yields on long - term government bonds have rebounded since late november. although stock prices considerably recovered after hitting the recent bottom in october, they have recently softened again. the yield spread ( the government bond yield minus the expected earnings on stocks ) remains extremely small or negative, reflecting market participants ’ continued cautious outlook on the future of the economy. with regard to corporate finance, firms are further seeking to secure ample on - hand liquidity in fear of more difficulties in raising funds, especially toward the end of this fiscal year when the large - scale redemption of corporate bonds is scheduled. meanwhile, private banks are continuing their cautious lending stance. in these circumstances, various policy measures seem to have prevented serious credit shrinkage : the enhancement of [ the? ] credit guarantee system [ s? ] contributed to a recent increase in loans to small and medium - sized firms ; and the bank announced the introduction of new measures, in addition to the continued ample supply of funds, to facilitate firms ’ financing activities. fundamentally, however, firms are still under severe fund - raising conditions. how corporate financing conditions towards the year - end and the fiscal year - end develop, and how such developments influence business activities and the whole economy, continues to warrant careful monitoring.

mechanism, to act as a custodian of fairness, overseeing the grievance redress process and to maintain equitable outcomes for all stakeholders. 1 / 5 bis - central bankers'speeches indeed, the office of the internal ombudsman in regulated entities can serve as the focal point for providing independent and unbiased perspective to customer grievance related decisions made by regulated entities. the internal ombudsman is expected to provide constructive feedback to the regulated entities by analysing the patterns and identifying the root causes of complaints and suggest policy level changes required at the level of regulated entities. however, on occasions, the efficacy of the internal ombudsman mechanism has been called into question, particularly when decisions taken by regulated entities are overturned by the rbi ombudsman or the appellate authority. such instances raise concerns about the efficacy of the internal ombudsman mechanism, especially the independence of the internal ombudsman. accordingly, i would like to highlight and elaborate upon four key areas for the internal ombudsman to focus upon for establishing a fair and just grievance redressal process. later i will also discuss the role of the regulated entities in supporting their ombudsman before concluding with a brief insight into the intent of our recently revised framework for internal ombudsman. independent impartial mindset firstly, i would urge internal ombudsman to adopt the mindset of an independent impartial observer and decision maker while adjudicating complaints. this entails cultivating a culture that prioritizes impartiality and objectivity in evaluating the merits of each complaint. moreover, recording a'reasoned decision'by clearly and transparently articulating the rationale behind the resolution is crucial since it instils confidence in the customer. unbiased constructive feedback secondly, offering unbiased and constructive feedback on policy misinterpretations to regulated entities is essential for fostering a culture of continuous improvement. internal ombudsman should objectively identify instances where policies have been misconstrued or misapplied and provide feedback that not only points out errors but also suggests constructive solutions. suggest ways for qualitative improvement in systems and procedures thirdly, internal ombudsman can also contribute to regulated entities by providing valuable insights and recommendations for enhancing systems and procedures for improved efficiency and effectiveness in grievance redressal. in doing so, the internal ombudsman becomes an instrumental