earlier, the financial system in japan has been regaining stability, and the blanket guarantee of deposits will be fully lifted on april 1, 2005. financial institutions will be expected to amplify their efforts to develop innovative services tailored to customer needs, thus supporting economic activity. the bank ’ s basic stance regarding financial system policy must shift its focus in response to this changing environment : from crisis management to supporting private - sector initiatives toward providing more efficient and advanced financial services via fair competition, while maintaining overall system stability. in order to contribute to enhancing the functioning and robustness of the financial system, the bank will actively encourage financial institutions ’ efforts to improve their business activities, and devise various ways to enhance its own business. conclusion although japan ’ s economy is at a pause, it is expected to continue recovering with the further expansion of overseas economies and progress in adjustment in it - related goods. to ensure that this recovery will become sustainable, the bank considers it essential that a wide range of economic entities continue to make efforts to revitalize the economy. the bank is determined to firmly support japan ’ s economy from the financial side by maintaining monetary easing with the commitment based on the cpi, in the current situation where the cpi continues to fall slightly on a year - on - year basis. it has become increasingly important for the bank to pursue more advanced services in a wide range of areas as well as ensure well - disciplined management to properly carry out the duties entrusted to it as the nation ’ s central bank. in light of this, the bank has for the first time formulated a medium - term strategic framework ( mtsf ) for fiscal 2005 - 2009, which sets out the bank ’ s management policy for the next five years. the bank is committed to continuing its efforts, through the steady implementation of this mtsf, to retain public confidence and fulfill its mission of contributing to the sound development of the economy.

timothy f geithner : developments in the global economy and implications for the united states remarks by mr timothy f geithner, president and chief executive officer of the federal reserve bank of new york, at the council on foreign relations'c peter mccolough roundtable series on international economics, new york, 11 january 2007. * * * it is a pleasure to be here at the council on foreign relations, and to be here with jerry corrigan. a few brief remarks about the global economy, both the real and financial dimensions, to provide a basis for our discussion. 2006 marked the fourth successive year of a global expansion that has been remarkable for its strength, for its breadth, and for its stability in the face of economic shocks and uncertainty in the geopolitical realm. this period of broad - based growth in income has been supported by a number of important fundamental forces. rapid technological innovation and greater economic integration have brought stronger growth and higher levels of productivity. the acceleration in productivity growth that occurred in the united states in the second half of the last decade seems likely to remain intact. and productivity growth is accelerating outside the united states, most strikingly in some of the large emerging economies. financial innovation and greater integration of national financial systems has contributed to the strength of real economic activity by improving the allocation of resources within and among economies. improvements to risk management and to capital cushions are likely to have made the financial system more stable and more resilient. and macroeconomic policy has improved around the world. the increase in monetary policy credibility in a broad range of countries has produced lower rates of inflation and more stability in inflation expectations. greater public confidence in monetary policy was critical to laying the foundation for the improvements in real economic performance, by providing a stable foundation for long - term investment decisions. in emerging markets, better monetary policy has been accompanied by more disciplined and conservative fiscal policy and a range of other policies that have reduced, though not eliminated, vulnerability to changes in confidence, capital flows and exchange rate movements. these factors are each fundamentally important, and they are, of course, interrelated. the policies that delivered better inflation outcomes, more openness and competition and stronger financial systems were critical to fostering an environment in which improvements in productivity and growth could occur. this expansion has also been notable for the financial conditions that have prevailed over the past several years. long - term interest rates have remained relatively low in nominal and real terms. equity and other asset prices have moved higher. credit