A new system for repurchase transactions (Repo’s) between the Reserve Bank and banking institutions will be introduced, and the banks will tender on a daily basis for an amount of central bank liquidity that will be determined by the Reserve Bank.
Of course, I do not have the answer to the tough question I raised shortly before. Nevertheless, concerning Japan’s experience, I do not think that either way of thinking is appropriate: to fear a specter, nor to take Japan’s experience just as unique. The United States and European countries obviously have an advantage of learning from Japan’s experience. 1 Japan was a lonely forerunner.