masaaki shirakawa : recent economic and financial developments and the conduct of monetary policy speech by mr masaaki shirakawa, governor of the bank of japan, to commemorate the 100th anniversary of the kanazawa branch, kanazawa, 25 may 2009. * * * introduction i am honored to have the opportunity to speak before business leaders in the hokuriku area today. i would like to express my deep gratitude for your close cooperation with the kanazawa branch of the bank of japan. in response to strong requests from three prefectures in the hokuriku area, the kanazawa branch was established in 1909 as the bank's first branch in the districts of honshu island along the japan sea. since then, the kanazawa branch has been operating in tandem with the development of the hokuriku economy, and this year the branch celebrates its 100th anniversary. the bank has 32 branches, including the kanazawa branch, and 12 local offices in japan. each of them conducts a variety of central banking operations, such as smooth provision of banknotes and coins, settlement of funds, treasury funds services, and research and analysis of financial institutions'business conditions and of economic and financial developments in the region. although these operations sound unspectacular, they constitute a part of the important infrastructure that supports financial and economic activity in each region. in fiscal 2008, the sum of receipts and payments of banknotes at the kanazawa branch was around 2 trillion yen – 200 million notes of 10, 000 yen bill. during the last 100 years, the kanazawa branch has strived to maintain an uninterrupted supply of banknotes in spite of occasional difficulties such as heavy snow and major earthquakes. we have renewed our determination to continue to fulfill our role of providing firm support for financial and economic activity in each region. i would like to express my gratitude again for your support and would like to ask for your continued cooperation with the kanazawa branch. before we exchange views, i would like to speak about the current situation of and outlook for the japanese and overseas economies and also about the bank's thinking regarding its conduct of monetary policy. i will mainly talk about economic and financial developments in japan and abroad from a macroeconomic viewpoint, but we do fully understand that the situation varies significantly for different regions and industries, and also for different sizes of firm. in fact, the bank gathers microeconomic information about industries and firms in

average, they provide the necessary capital buffers to properly address the elevated risk profile of greek banks. nevertheless, restoring the capital position of greek banks represented only the first step of a more comprehensive reform plan to restore confidence in greek banks. over the past months the focus has been on the resolution of non - performing loans ( npls ) and on improving bank governance. the non - performing exposure ( npe ) ratio of greek banks is very high ( 49 % in june 2016 ), the second highest in the euro area, after cyprus. its reduction is a key precondition for gradually restoring an adequate and efficient supply of credit to the greek economy, and for achieving sustained growth. some important legislative reforms in this direction have already been passed. for instance, the household insolvency law was amended to ensure that banks can take legal steps against strategic defaulters and that debtors make payments in line with their ability to pay. and the code of conduct of the bank of greece provides guidelines on the interaction between banks and debtors in arrears. the authorities have also adopted legislation that liberalises npl servicing for all loan categories, and provided a framework for the sales of loans. in addition, banks have set up comprehensive strategies, including detailed operational measures and actions, prioritised and scheduled, as well as numerical targets to significantly reduce their npe stocks over the coming years. banks are also reshaping their governance structures in compliance with new greek regulations and international regulations and guidelines. while the process is still ongoing, considerable progress has already been made in the review of boards of directors. strict application of the criteria set under greek law will be key to increase the knowledge, relevant experience and independence of bank directors. the policy actions i have outlined have already started to show effects. since the imposition of 2 / 4 bis central bankers'speeches the capital controls in greece in june 2015, the liquidity position of greek banks has improved, albeit at a slow pace. deposits have increased slightly and banks have regained access to market funding based on high - quality collateral. dependence on central bank funding has been reduced to about €78 billion. working together towards the same goal while the conclusion of the first review constitutes a first major step in safeguarding financial stability, preparing the ground for a sustainable economic recovery and regaining access to international capital markets, let me be very clear : more is yet to be done. the mere fact that bank deposits linger at about three - quarters of their level of