need - to - be - treated - with - caution. the network of its head office and branches, and the insights it obtains remain crucial. thus, in terms of making policy decisions, what is important is not only to look at official statistics, interviews with firms, and historical analysis to grasp the medium - to long - term trend in data but also to make effective use of high - frequency data as complements to these. second, it is essential for the governments and central banks to cooperate with each other in terms of fiscal and monetary policies, while fulfilling their respective roles, in order to address such economic crises as the current one. basically, central banks can provide liquidity through lending but cannot spend money. it is the private sector and the governments that can spend money. 19 the role of central banks is to conduct monetary policy, while the governments are mainly in charge of fiscal policy and public health measures concerning infectious diseases, as well as growth, trade, and urban policies. such cooperation will have positive effects on price developments as well. assuming that an infectious disease exerts downward pressure on the natural rate of interest, large - scale fiscal policies may work to push up that rate. it is also important to raise people's growth expectations by enhancing market environments mainly through regulatory reforms. in particular, in order to further push forward with telework and digital transformation, what is essential is investment in information and communication technology ( ict ), as well as investments in training of employees and reorganizing corporate structures, both of which complement such technology. with investment in general remaining weak, ict investment powell, chair of the federal reserve, stated at the press conference held on april 29, 2020 as follows : " i would stress that these are lending powers and not spending powers. the fed cannot grant money to particular beneficiaries. we can only make loans to solvent entities that the - - with the expectation that the loans will be repaid. many borrowers will benefit from our programs, as will the overall economy. " as for the transcript, see https : / / www. federalreserve. gov / mediacenter / files / fomcpresconf20200429. pdf. in japan has continued to stagnate since the 1990s ( chart 12 ). 20 this investment should be regarded positively as one with an eye on the future, not as a cost that should be cut. thus, with high uncertainties over developments in the

the special funds - supplying operations to facilitate financing in response to the novel coronavirus ( covid - 19 ), which will be about 100 trillion yen at maximum. through this special operation, the bank provides funds on favorable terms to private financial institutions that make loans in response to covid - 19. the operation also is applied to effectively interest - free and unsecured loans, for which the government takes the credit risk, provided mainly to small and medium - sized firms through private financial institutions. this represents a case of cooperation between the bank and the government to support financing, mainly of firms. second, to maintain stability in financial markets, the bank has adopted a framework through which further ample yen and foreign currency funds can be provided in a flexible manner. as for the yen funds, under yield curve control, the bank decided to purchase a necessary amount of japanese government bonds ( jgbs ) without setting an upper limit. regarding foreign currency funds, the bank has provided a large amount of u. s. dollar funds through the strengthened u. s. dollar funds - supplying operations. third, the bank has actively purchased exchange - traded funds ( etfs ) and japan real estate investment trusts ( j - reits ). the aim of this measure is to lower the risk premia in asset markets, thereby preventing firms'and households'sentiment from deteriorating through volatility in asset markets and supporting positive economic activity. on may 22, deputy prime minister and finance minister aso and bank of japan governor kuroda together released a statement on countermeasures responding to covid - 19, making clear that the government and the bank are " committed to making every effort to facilitate corporate financing and maintain stability in financial markets and doing whatever it takes to settle the situation, and will work together to bring the japanese economy back again on the post - pandemic solid growth track. " 1 " statement by minister aso and governor kuroda on countermeasures responding to the novel coronavirus ( covid - 19 ), " may 22, 2020, https : / / www. boj. or. jp / en / announcements / press / danwa / dan2005a. pdf. the bank's powerful monetary easing measures have had positive effects. although financial markets are still nervous, tension has eased recently ( chart 5 ). in march, reflecting unstable conditions in global financial and capital markets, the volatility of stock prices increased to a level observed for the first