Also in Japan, starting in the middle of the 1990s, a weakening of the financial sector and a series of bank failures led to a breakdown of the interbank market, in some respects not unlike the situation we are facing today in Europe.
In such a context, there are two questions that arise for a central bank and that I would like to address tonight. First, how is monetary policy affected when the interbank market does not exist? Second, how can the interbank market be restarted?