##lationary gap in japan ’ s economy, which is already suffering from lack of demand, might become wider. we can certainly understand the background to such concern. indeed, looking at examples of structural reform overseas, there seem to be many cases where there was a deflationary impact in the short term. and, in contrast with the us and uk, the economy cannot expect to receive additional ‘ dividends ’ such as a substantial decline in long - term interest rates accompanying fiscal consolidation, since in japan there is little room for any further decline in interest rates. however, the bond market is not the only market which assesses structural reform. if the stock market favorably evaluates specific efforts toward the resolution of structural problems, there might be positive effects on the economy from this channel even in the short run. moreover, it should be noted that, in the case of japan, delay in effecting structural reform has made the problem of weak demand all the more serious. in this context, i would like to refer to the fact that private consumption has been very slow to increase. of course, various factors might be behind this, one being uncertainty with respect to pensions and the tax burden in the future because of the rapidly aging population. therefore, in order to stimulate private consumption, it is essential to reduce future uncertainty as much as possible. according to textbook keynesian economics, the expansion of fiscal expenditure financed by the issuance of government bonds will stimulate an economy unless taxpayers hold back consumption reflecting expectations of a future increase in the tax burden. however, if public investment generated by a fiscal deficit is inefficient, production capacity of the economy as a whole will not increase and the ‘ wealth ’ which generates future income and consumption will not accumulate. and, if such investment clearly suggests an increase in the future tax burden and delay in structural adjustment, then it would have an adverse impact on current consumption. from this viewpoint, once it became clear that the content of fiscal expenditure was going to be shifted from less efficient to more efficient objectives, resulting prospects of an increase in future ‘ wealth ’ might have a favorable effect on the economy. compared with a situation where there is little room to mobilize conventional monetary policy instruments, room for effecting policies which focus more on the ‘ quality ’ of fiscal expenditure seems to be significantly large, as mentioned in the ‘ basic plan ’. nevertheless, what i have just said does not mean that i am optimistic enough to consider that the promotion of structural reform will

at a great speed. up until yesterday we used physical databases, and today we use blockchain technology. from atms we switched to user service based on artificial intelligence. transactions which took days, are now implemented in real time. all of this is saving time as the most precious resource. and it is a huge potential for the coming period. dear colleagues, in the end, i would summarise, in a slightly different way, the challenges, but also the opportunities. a popular topic, which is discussed almost fatalistically, is the " green agenda ". however, climate challenges are not new, only the awareness that we have lost precious time has increased. threats to the environment simmered in both the 19th and 20th centuries. however, history has destined us to solve them strategically, which involves the banking industry and central banks, and there is no substitute for regional cooperation! digitalisation has been talked about almost fatalistically lately. there is no doubt that digitalisation brings enormous potential for progress. however, new technologies also bring us new risks such as cyber security, data protection or the concentration of market participants. and as responsible market regulators, we have to take care of that. policy - making in the era of fake news is also a challenge as fake news can make difficult the process of managing expectations which are an important channel of policy transmission. challenges arise also when individuals think that policies can be run via social media, individuals whom i call " advisors without skin in the game ". it is our duty to continue making decisions based on data and in - depth analyses, aware at the same time of the importance of the words we use. today, transparency is one the important features of central bank's work, and we want our decisions to be understood and we want to serve citizens in the way they deserve. what lies ahead is the period of building up our knowledge base by continuous reviewing of the effects of our policies and actions, as well as the increasing use of artificial intelligence that must be managed by man as the one who has created it. these are important lessons for the future. still, investment in people, cooperation and diversification remains the best investment in the future! i have always believed that the greatest value is to be a friend to a friend. and i don't want anyone convincing me that friendships don't exist and that that there are only alliances based on interest. isn't our interest cooperation and survival? it is. we shall exist