The restrictions also ensured orderly conditions on the securities markets: The Riksbank arranged a queue for the issuance of new securities and monitored the timing and sequencing of issuance in order to match it with the available liquidity and investor appetite. Another aim of the restrictions was to make it more difficult to circumvent the domestic restrictions on the credit market through overseas transactions. Finally, I must admit that there was a degree of protection of the Swedish financial institutions from foreign competition. The regulations on the domestic credit market as well as of capital movements resulted in a highly rigid and underdeveloped Swedish financial sector. However, given the oligopoly situation the sector was rather profitable. You might conclude that the priority purposes were subsidized at the expense of the banks’ savers. Regulation, policy mistakes, and their consequences Starting from the late 1970s it became gradually more obvious that the restrictions did not function as planned. The financial sector became gradually more inefficient since it could not progress in line with external developments and it could thus not provide the necessary new financial services to support the overall economy which was undergoing modernisation. The restrictions were in various ways circumvented by the institutions themselves and by other market participants. Instead of promoting financial stability the restrictions led to increasing vulnerabilities, for instance when the share of lending provided by less regulated entities increased. The restrictions on capital movements meant that imbalances in the Swedish economy were not always identified as early as they should have been.

Among the factors behind these differences are the date that the first cases appeared, the speed of the spread of new cases, how strictly containment measures were adopted and the response of the population. In the case of China, the greatest impact of the pandemic was recorded in the first quarter. Peru, on the other hand, saw a dramatic drop in the second quarter, as strict nationwide quarantine was implemented. Incoming information for Chile suggests that activity is picking up in sectors that had been particularly hard hit, such as retail and some services (Figure 5). This reveals that some activities have managed to adapt more quickly to new forms of operation, notably a more intense use of online sales and teleworking. In contrast, sectors such as construction, which are highly intensive in on-site work, have suffered greater than expected consequences, given the territorial and time extension of the quarantines. Because of its highly contagious nature, the pandemic caused a particularly sharp contraction in demand and supply in socially intensive areas, directly affecting the incomes of businesses and individuals. This has had a strong impact on the labor market, including self-employment. Thus, in the moving quarter ending in July, the annual drop in employment affected slightly more than 1.8 million jobs. About half of this figure corresponds to salaried jobs, mostly formal. Another 760,000 interrupted occupations correspond to non-salaried workers (i.e. self-employed workers and employers).