and financial situation developed since our assessment in march? global economic outlook global economic activity declined more sharply than expected in the first quarter of 2009, especially in europe and japan. however, recent financial and macroeconomic indicators have shown a few encouraging signs. stock exchange indices have started to edge up. oil prices, which had been falling since july 2008, have been rising again since march. risk premia in the money and capital markets have declined. in addition, the indices of business activity and household confidence has clearly turned upward again, even if they remain at historically low levels. the combined effect of all these developments leads us to modify our risk assessment but does not substantially affect our scenario for the global economy. we still believe that positive growth could set in within the us in the second half of the year and in europe at the beginning of next year. we continue to expect a modest global recovery, so that the considerable under - utilisation of production capacities will not be eliminated in the next few quarters. consequently, unemployment is likely to increase further in the developed countries as a whole. swiss economic outlook as expected, the swiss economic situation continued to deteriorate in the first months of the year. in the first quarter, gdp contracted by 3. 2 % in annualised terms. however, this figure obscures a much sharper drop in final demand. as in the preceding quarter, part of production was, in effect, absorbed by an increase in stocks. external demand again plummeted and the level of capacity utilisation fell substantially in the manufacturing sector. final domestic demand by private entities stagnated, and is most likely to weaken in the months ahead, since companies will reduce their equipment investment and household expenditure will be checked by growing uncertainty in the labour market. the number of individuals affected by short - time working was rising fast at the beginning of the year, and unemployment is increasing at a regular pace. this trend is likely to persist in the next few months since the leading indicators of labour demand are falling sharply. nevertheless, it is to be hoped that the signs of improvement observed abroad will be gradually transmitted to the swiss economy. from the second quarter, the decline in exports is likely to slow down. however, growth figures will probably remain negative over the next few quarters due to the weakening in domestic demand as well as the reduction of inventory levels. for 2009 as a whole, the swiss national bank ( snb ) continues to forecast a reduction in gdp of between 2. 5 %

turmoil has shown that the world – our economies and financial systems – is more complex and more interdependent ; that underlying factors, processes, risks and vulnerabilities can interact in a ways that have not been previously envisaged. it is, therefore, essential to pursue specific research topics and to bring the various strands of work more closely together. this symposium with its varied programme provides a great forum for advancing this objective. with regard to the policy issues i previously highlighted, it would seem to be particularly useful if economic research could further contribute in four specific areas : • the development of models and indicators that help identify growing financial imbalances and emerging vulnerabilities and provide early warning signals ; • the analysis and improvement of incentive structures, especially those associated with the various stages of the securitisation process ; • the construction of effective models for stress - testing of tail and correlated risks, including funding liquidity risk, as well as more realistic models for macro stresstesting ; • the further elaboration of the interactions between the real economy and the financial system, with greater emphasis on the role of financial frictions, the determination of risk, and their effects for the dynamic and stochastic properties of the economy. this list of research topics is not complete, but it is policy - relevant and analytically challenging. in conclusion, i would like to make one final and general point. in pursuing a research agenda, it is important to maintain a broad perspective – to keep in mind and look at the “ big picture ” – as defined by the main policy objectives and key policy functions and by the interconnections of ongoing processes, such as financial integration and innovation, and their implications for economic performance and the attainment of the policy goals of efficiency and stability. precisely because these interconnections and effects are complex, manifold and evolving, a deeper understanding of the fundamental processes is essential. this network, with its theoretical contributions and empirical analysis, can undoubtedly provide valuable and highly appreciated input into the deliberations and decisions of policy - makers. i wish you all the best and an enriching and successful symposium. thank you very much for your attention.