We have demonstrated with our unconventional tools that it is possible to engineer accommodative financial conditions even when the equilibrium interest rate is low. And we have shown that this can be effective in supporting domestic demand and stoking domestic price pressures even when disinflationary headwinds are blowing from the global economy. But the global nature of low inflation does have two important implications.
Third, governments need to swiftly implement the far-reaching set of measures, designed to  2  BIS Review 48/2009  support the financial system. With fellow governors, Governor Shirakawa has convincingly argued that resolute action to put commercial banks in a healthy situation was absolutely indispensable in the experience of Japan at the beginning of the millennium.