Chart 1
Policy Rate and Lending Rates in the Euro Area
8
%
Policy rate (ECB)
7
Germany
Portugal
Spain
6
5
4
3
2
1
0
2007
08
09
Year
10
11
12
Source: European Central Bank.
Chart 2
Gaps between Observed and Expected Spreads over German Bonds
2,500
bps
Expected spread based on historical norms
2,000
Observed spreads
1,500
1,000
500
0
-500
France
Italy
Spain
Ireland
Notes: 1. Actual spreads refer to 10-year bond yields as of September 4, 2012.
2. Expected spreads are based on the past relationships between yields and debt rates.
Source: Organisation for Economic Co-operation and Development.
Portugal
Greece
Chart 3
Money Stock, Monetary Base, and Loans in the Euro Area
300
2000/1Q = 100
Bank loans
250
Monetary base
200
Money stock (M3)
150
100
50
0
2000
01
02
03
04
05
06
07
Year
08
09
10
11
12
Sources: Bank of Japan; Cabinet Office; European Central Bank; Eurostat.
Chart 4
Money Stock, Monetary Base, and Loans in Japan
300
2000/1Q = 100
Bank loans
250
Monetary base
Money stock (M2)
200
150
100
50
0
2000
01
02
03
Sources: Bank of Japan; Cabinet Office.
04
05
06
Year
07
08
09
10
11
12
Chart 5
Estimated Premiums Charged on Sovereign Bond Yields
2,000
bps
bps
2,000
1,500
1,500
1,000
1,000
500
500
0
0
-500
-500
Japan
United
States
United Germany
Kingdom
France
Italy
Spain
Ireland
Portugal
Greece
Note: Estimated premiums in Japan, the United States, and the United Kingdom are differences between observed and estimated
5-to-10-year forward rates as of May 2012, and those in France, Italy, Spain, Ireland, Portugal, and Greece are differences
between observed and expected 10-year bond yields, shown in Chart 2.
Sources: Organisation for Economic Co-operation and Development; Bank of Japan.
Chart 6
Nominal Effective Exchange Rates
130
start of 2004 = 100
120
Yen
U.S. dollar
Euro
110
100
90
80
70
20 04
05
06
07
Sources: Bank of Japan; European Central Bank; Bloomberg.
08
Year
09
10
11
12
Chart 7
Basic Scheme of U.S. Dollar Funds-Supplying Operations
Collateral
Financial
institutions
Bank of Japan
Yen
U.S. dollars
U.S. dollars
Federal
Reserve Bank
of New York
Euros
European
Central Bank
U.S. dollars
Pounds sterling
U.S. dollars
Bank of
England
Collateral
U.S. dollars
Collateral
Financial
institutions
Financial
institutions
U.S. dollars
Note: Participated in by the central banks of Canada, the United Kingdom, Japan, the euro area, the United States, and Switzerland.
Chart 8
European Banks’ U.S. Dollar Funding Costs (3-Month)
2.6
%
2.4
2.2
2.0
1.8
1.6
LIBOR (European banks)
FX Swap-implied U.S. dollar rate
(euro/U.S. dollar)
Interest rate on the U.S. dollar fundssupplying operation
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
Jan-11
Source: Bloomberg.
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12