During the period of the adjustment process, Japanese firms have been innovating continuously to strengthen their competitiveness. They have also expanded the global supply-chain network with a particular emphasis on developing their strategic linkages with Asian counterparts. Meanwhile, the Japanese banks have overcome the non-performing loan problem and are currently better positioned to respond to the demands for sophisticated financial services of the times.
Such revitalization of both firms and banks should improve the efficiency of the market mechanism, thereby enabling a better allocation of resources. 4. Several questions to be discussed  In what follows, let me raise several questions that I hope are discussed at this conference. First, how have financial markets functioned in the historically low interest rate environment?