It was also agreed at the meeting that, in view of the downside risks to the economic outlook, it had become more likely that the return of Japan’s economy to a sustainable growth path would be delayed compared to what had been projected earlier.
Up until the last several years, microprudential regulation would have come close to covering the entire field of prudential regulation. The financial crisis highlighted the need to supplement traditional microprudential regulation with a macroprudential approach oriented toward the well-being of the financial system as a whole.