That is, if the target level is reviewed frequently,there is a risk that the credibility of the target might decline, leading to possible market volatility.
That said, the cooperation between monetary andfiscal authorities entails difficulties in terms of ensuring public confidence toward macroeconomic policy.
If the credibility of its fiscal management were to decline, long-term interest rates would likely rise in a manner inconsistent with economic and price developments.
Also as in 1997, however, countries like India(largely unaffected in 1997-98) and Indonesia, with big current-account deficits,remain vulnerable to a loss of foreign confidence.
Confidence in government bonds is sometimes considered from the viewpoint of confidence in Japan's economy as a whole, by focusing on the current account balance and net external assets.
Originally, inflation targeting is a policy framework to enhance the transparency regarding the conduct of monetary policy andto strengthen the credibility of the commitment to price stability.
Post, transmit or facilitate the transmission of any user content that you do not have a right to transmit,under any law or under contractual or fiduciary relationships(such as nondisclosure agreements);
F Fiduciary Duty Fiduciary duty collectively refers to the wide range of roles andresponsibilities borne by those who have gained the trust of others to perform certain services on their behalf.
We are mindful of the risk of synchronized adjustment on the global recovery and of the risk that failure to implement consolidation,where immediately necessary, would undermine confidence and growth.
Large-Scale Purchase of Government Bonds and the Credibility of Currency The third point is related to the large-scale purchase of government bonds and its relationship with maintaining the credibility of currency.
These increased the opaqueness of management of financial institutions and, contrary to the expectations of the parties concerned,spurred the deterioration in the credibility of Japan's financial system as a whole.
Even during times of a crisis, if central banks take time-inconsistent policy measures,this could rather have negative effects on confidence in the central bank, and as a result reduce the effectiveness of monetary policy.
Such circumstances increased the lack of transparency with respect to the management of financial institutions, and, accordingly,accelerated the deterioration in the credibility of Japan's financial system as a whole.
We will continue striving to win the confidence of various stakeholders to become a corporation that broadly contributes to society, and will actively communicate information regarding the initiatives taken by the UBE GROUP.
In order for the Bank to pursue powerful monetary easing with the aim of achieving the 2 percent price stability target,it is important for the credibility of fiscal management to be firmly ensured in the financial markets.
What I said in my Mundell-Fleming lecture was that simplemodels don't seem to have room for the confidence crises policymakers fear- and that I couldn't find any plausible alternative models to justify those fears.
We, the G-20 Finance Ministers and Central Bank Governors, met at a time of heightened tensions and significant downside risks for the global economy thatneed to be addressed decisively to restore confidence, financial stability and growth.
I presume that these phenomena not only have become one of the factors behind reduced predictability of monetary policy and increased volatility in financial markets,but also have led to impairment of the credibility of the Bank's monetary policy conduct.
The Bank of Japan expects that the decision of the two banks will greatly contribute to the stability andrestoration of confidence in the Japanese financial system, and will lead to future positive action by the management of other financial institutions.
However, if the credibility of fiscal management were to wane and QQE to become widely perceived in financial markets as financing fiscal deficits, this could entail a risk that the effects of QQE will be constrained by a rise in interest rates brought about by an increase in risk premiums.
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