Second, I put an emphasis on the importance of the financial regulation and supervision. Especially given that each bubble is different, it is absolutely essential to have a supervisory framework from the perspective of macro-prudence to accurately grasp the overall risk. Third, monetary policy has to aim at domestic stability, which amounts to sustainable economic growth under price stability.
We must bear in mind that focusing on foreign exchange rates and current accounts can be detrimental to the stability of the domestic economy. Financial and capital market developments under the “two-speed recovery” Let us now move on to my third point in making projections for the global economy.