By introducing the fundprovisioning measure to support strengthening the foundations for economic growth, the Bank has raised awareness of this issue and, in my view, should continue with the measure in the future.20 Although the measure has met with severe criticism that it has prompted a race among financial institutions to lower lending rates, financial institutions’ lending stance to firms – regardless of their size, from small ones to large ones – for investment in new growth areas fortunately appears to have turned more active.
In particular, it is possible that the Federal Reserve could for a time use the interest rate paid on reserves, in combination with targets for reserve quantities, as a guide to its policy stance, while simultaneously monitoring a range of market rates.