From this painful episode, we have learned two things. One is that financial stability is the foundation of sustained growth of the economy, and another is that changes in potential growth amplify the financial cycle and consequently impact financial stability.
The widespread recognition in the international policy fora of the need to take account of the macroprudential perspective may be a consequence of the recent global financial crisis, but Japan’s predicament that preceded it seems to amply underscore the importance of such a perspective. To me, this was a formative experience as a central banker. I have attached importance to macroprudence ever since.