The sale of stocks to the Bank of Japan by commercial banks alleviates the potential negative impact on their financial position and enhances their risk-taking capability. In the course of taking these unconventional measures, we have learned a number of new things. Among these, let me share with you two of them. First is the side effect of quantitative easing.
Within the quantitative easing framework, the market function is weakening in the money market. Under zero interest rates, market participants with their cautious investment attitude feel little incentive to lend in the money market, and as a result the market is shrinking.