In order to supply liquidity to companies quickly and with minimum red tape, the Federal Council drew up an aid package, together with the SNB, the Swiss Financial Market Supervisory Authority FINMA, and the banks. Under this programme, the banks grant loans to companies. The Confederation assumes the default risk and the SNB provides the banks with liquidity through a new refinancing facility. Thanks to this facility, banks can refinance these loans favourably at the SNB policy rate of  Page 2/5  –0.75%. All indications are that the supply of credit and liquidity to small and medium-sized enterprises in Switzerland is currently working well. Another feature of the financial centre is that, in carrying out their activities, banks and insurance companies themselves add value and create jobs. The financial sector is an important employer in Switzerland, with around 218,000 full-time positions in 2018. In that year, it generated a nominal gross value added of around CHF 63 billion, or almost 10% of GDP. 1 Its size, however, means that both positive and negative developments in the sector have a particularly strong effect on Switzerland. The SNB, too, is dependent on an efficient and effective financial sector. This is because by granting loans, the commercial banks transmit our monetary policy to the Swiss economy. And by participating in the Swiss franc repo market, insurance companies, too, play a role in Swiss money market pricing. The financial sector thus makes an important contribution to the transmission of our monetary policy.

Much of these data were granular enough to differentiate economic effects across the income, sector and geographic distributions. 10 The fourth and final set of issues involves the interaction of pre-pandemic structural trends with cyclical developments. The recent global shocks have deep implications for previously identified structural trends such as secular stagnation and the shifting relationship between technology and jobs. Workers’ increased reliance on remote solutions during the pandemic probably accelerated the digitization of tasks, which in turn has broader implications for income distribution and productivity growth, as well as the property market. In contrast, other structural trends may have been somewhat arrested by recent events; for example, pandemic and geopolitical disruptions injected fresh fragmentation impulses to the world economy and possible unmoored economies from their previous low inflation equilibria. 11 These four issues—the complex nature of shocks, along with the appropriate policy response, labour market effects and interactions with pre-pandemic structural trends— are key pivots that confront the global economy. And they will each have some hearing at this year’s Forum. Prof Viral Archarya started us off last evening with an astute and realistic assessment of the global landscape before us and the vulnerabilities that lurk in financial market adjustments, drawing in insights from his research. 12 For the Policy Note session on “Labour Market Policies after COVID-19”, our speakers are Professor Eric French and Professor John Haltiwanger, two eminent labour economists whose work central bankers have always paid close attention to.