1990s, and the current global financial crisis. however, the impact of these crises was very different : severe in the former, and relatively mild in the latter. i believe the difference is partly due to the enhanced cooperation among the central banks of the emeap member economies. the bis provides secretariat services to various committees and high - level meetings of central banks and supervisory authorities such as the financial services board, the basel committee on banking supervision, the committee on payment and settlement systems, and the committee on the global financial system. the bis also functions as the study and research center for global finance and economics. the primary objective of the emeap resembles that of the bis. it is to strengthen the cooperative relationship among its members. the emeap started as the regular meetings for the deputy governors. since 1996, it has developed into a triple layered system similar to that of the bis, with the governors ’ meetings, deputy governors ’ meetings and working group meetings. bis central bankers ’ speeches the asian currency crisis highlighted the structural vulnerabilities in the region ’ s economies : first, there was the double - mismatch of currency and maturity in the region ’ s financial sector, and second, corporate finance remained highly dependent on banks. as a result, asian countries were vulnerable to sudden changes in global financial markets and their abundant savings were not being mobilized effectively within the region. to rectify the problem of overdependence on banks, the emeap started the asian bond fund ( abf ) initiative to promote local - currency bond markets, a project giving members the opportunity to invest in bonds in asia. in parallel, the governments of asean + 3 member countries are now implementing the asian bond market initiative ( abmi ) to foster deregulation and to create an environment conducive to investment. the results have been impressive : the local - currency bond markets in asia have developed significantly, as shown in figure 1, in terms of amount outstanding for both government and corporate bonds. the share of asian - currency bonds in global bond markets increased from 2. 1 % at the end of 1996 to 8. 4 % at the end of 2011. what is remarkable here is that the presence of foreign investors in a number of local - currency bond markets in asia is rapidly increasing, as shown in figure 2. this can be attributed to the enhancement of the market infrastructure of these economies, not just because of improvements in the risk / return profile of these bonds in terms of the

attracted our attention. first, the decline in demand following the consumption tax hike has been somewhat protracted in durable consumer goods including automobiles, as well as in housing investment. second, crude oil prices have declined substantially after the summer. these factors have contributed to slowing the cpi inflation rates, which had hovered in the range of 1. 0 – 1. 5 percent since the end of the last year, down to 1. 0 percent in september. of the two factors, the temporary weakness in demand associated with the consumption tax hike has already started to wane. meanwhile, the decline in crude oil prices will have positive effects on economic activity and push up prices over the longer - run. nevertheless, given the fact that japan ’ s economy is currently in a transition process of converting the deflationary mindset, prolongation of the current downward pressure on prices, albeit temporarily, was bis central bankers ’ speeches judged to run the risk of delaying the process. to prevent such risk from materializing and to maintain the improving momentum of expectation formation, we decided to take preemptive actions to expand the qqe at the monetary policy meeting held on october 31 ( chart 1 ). specifically, we decided to accelerate the pace of buildup in the monetary base by about 10 – 20 trillion yen to “ an annual increase of about 80 trillion yen. ” in order to carry this out, we will increase the amount outstanding of the holdings of japanese government bonds ( jgbs ) by about 30 trillion yen to “ an annual increase of about 80 trillion yen. ” at the same time, we decided to extend the average remaining maturity of the jgb purchases by about three years at maximum to “ about 7 – 10 years. ” the purpose of the measures is to leave operational flexibility to buy jgbs from across the maturity zones and thus effectively compress the entire yield curve in line with market conditions, whereas the downward pressure on the yield curve has been rather uneven thus far, with substantial declines in rates on the shorter end while rates on the longer end remain relatively high. in addition, as for exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ), the increases in the amounts outstanding of the bank ’ s holdings will be tripled in both cases. the latest decision to expand the qqe will further strengthen the policy transmission mechanism that i mentioned at the outset. the decision is also intended to demonstrate and confirm our strong and unequivocal