Of course, these changes cannot entirely be attributed to the effects of QQE implemented by the Bank of Japan. However, it can be judged that QQE has been producing its intended effects through the transmission mechanism envisioned at the time of its introduction. Let me review the transmission mechanism of QQE.
Banks, for example, now have to comply with a strict set of rules – they have to hold more and better capital than they did ten years ago. Their capacity to absorb losses has increased significantly. Banks are better prepared for a potential drying-up of liquidity sources, as the quantitative and qualitative requirements regarding liquidity management have risen significantly.