At the same time, though, the funds thus supplied represent an increase in its "liabilities," while for the financial institutions they represent an increase in their "assets" in the form of increased current account deposits with the Bank or  2  BIS Review 104/2008  banknotes.
This is because, under a deflationary slump, the pain caused by promoting competition through deregulation encounters strong resistance. One often refers to “creative destruction”, but under deflation there is no creation after destruction. Furthermore, even though structural reform is making progress under the growth strategy, it is supply-side policy that enhances the production capacity of Japan’s economy.