Stated differently, with the NPL problem unresolved, Japan’s financial system has significantly contracted in terms of the number of players and volume of assets. However, despite the painful experience of the past ten years, we have yet to restore credibility in our financial system that still receives harsh criticism from both home and abroad.
Finally, I would like to highlight the importance of improving cooperation and the exchange of information between supervisory authorities and central banks on financial stability issues. The recent financial market turmoil has confirmed the importance of a smooth and efficient relationship between the central banking and supervisory functions.