After constructing the wealth price index as the weighted geometric mean of current product price inflation (GDP deflator) and future price changes represented by aggregate asset price of the national wealth in the national accounts, he argued that the BOJ could have envisaged future inflation if the wealth price index had been employed in the mid-1980s, in addition to the conventional CPI (Figure 3).
From a supervisory perspective, let me redraw that the past financial crisis have evidenced the fact that micro-prudential supervisory instruments and tools alone, if used in an isolated way, may no longer be sufficient to address the challenges posed by financial instability. The need has been highlighted to restructure regulation and supervision and to go beyond a purely micro-prudential approach in this regard.