. thus, the export environment is not significantly deteriorating as a whole. however, exports to asia, especially to thailand and the republic of korea, have started decreasing. furthermore, slowdown of economic growth in east asian countries is bringing about a fall in international commodities prices, especially those of raw materials. this is beginning to affect the profits of materials manufacturers in japan, and as a result, some of these firms are planning to curtail production. thus, careful observation of economic trends including these kinds of indirect impact is necessary. in addition to developments in the real economy, the problem of nonperforming loans is surfacing in the asian countries, although the degree differs from country to country. according to statistics compiled by the bank for international settlements ( bis ), the total credit exposure of japanese banks to asian countries amounts to us $ 270 billion, which accounts for about 30 percent of the total exposure of world ’ s financial institutions to asia. however, these figures include japanese banks ’ credits to asian branches and affiliates of japanese, u. s., and european financial institutions. furthermore, a large portion of business credits of - 7japanese banks are extended to japanese affiliates with a guarantee given by their parent companies. according to the bank ’ s survey, japanese banks ’ credit exposure to non - japanese firms and local banks in asia appears to be around 30 to 40 percent of the total credit exposure reported in the bis statistics. moreover, most of such credit is loans to sound major banks and firms and project finances, which are unlikely to turn into nonperforming loans. as discussed above, the impact of the currency and financial turmoil in asia on the real economy and financial market of japan has been limited to date. however, the economic situation in this region remains unstable. therefore, the degree of economic slowdown and developments in the nonperforming - loan problem in these countries must continue to be monitored. iv. recent financial and economic conditions and monetary policy management in japan a. domestic financial and economic conditions i would now like to move on to today ’ s last topic - - the recent economic situation in japan. the decelerating trend of japan ’ s economic growth since april 1997 has been intensifying recently. in final demand, exports and business fixed investment continue to be on an upward trend, supporting economic activity. however, household spending such as personal consumption and housing investment, which fell substantially following the rise in the consumption tax rate in april 1997, is recovering only at

christian noyer : euro area ’ s situation – analysis, challenges and solutions lunch - debate by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at the montreal conference : “ demographic shifts – threats or opportunities? ”, montreal, 11 june 2012. * * * prime minister, governor, mr chairman, ladies and gentlemen, it is a great pleasure and honour to participate in this lunch - debate with you today. i would especially like to thank the international economic forum of the americas and its chairman for organising this montreal conference, which for the past 18 years has been a major international economic event. i would also like to take this opportunity to share my analysis of the euro area ’ s situation, the challenges we face and the solutions available to us. before doing so, i think that it would be useful to say a few words about the international economic situation. at the global level, growth is expected to slow down slightly in 2012 compared with 2011, notably due to a moderation in growth in europe and a little bit also in emerging countries, in particular china. the united states is recovering relatively rapidly, but faces a number of challenges, especially with regard to its fiscal situation and the housing market. overall, – and this is one of the things that the crisis has clearly highlighted since 2008 – the world ’ s economic areas are closely interlinked and problems end up being shared. consequently, some solutions can only be applied at the international level. this is why the g20 has grown in significance since 2008. we need to make further progress in international cooperation, in particular to identify the sources of global financial imbalances and reduce them via the “ framework for strong, sustainable and balanced growth ” and to improve international financial regulation. as regards the latter, we must always bear in mind our twofold objective : enhancing financial stability while ensuring the financing of the economy. i would now like to turn to the situation in the euro area. as you know, in 2011, the sovereign debt crisis in the euro area was particularly ferocious, spilling over to countries with sound economic fundamentals. the first three months of 2012 had shown a few signs of improvement, in particular thanks to the eurosystem initiatives and positive political impulses : pressure on sovereign debt eased slightly, and bank financing and money markets recovered somewhat. but since april, sovereign debt and banking systems have come under renewed pressure. the two main driving factors behind this deterioration