The financial aid packages for stressed banks and fiscal and social stimulus programs to combat the recession disclosed painfully the limits of the financial capacity in some countries. With hindsight we have to acknowledge that some countries allowed fiscal profligacy, weaknesses in the banking sector and deteriorating competitiveness.
I imagine that, from the perspective of business managers, the “fear of no bottom in sight” may have gone, but the “anxiety of no future in sight” may remain significant. Today, I would like to talk about recent financial and economic developments at home and abroad, the thinking behind the Bank’s conduct of monetary policy, and medium- to long-term challenges for Japan’s economy. I.