american economy and stock market values are high, both in a historical comparison and in relation to the current cyclical phase. opinions differ somewhat about the imbalances in the united states. many observers focus on and are worried about structural imbalances in the u. s. economy. the adjustment problems, after undue optimism among households and firms in the late 1990s had given rise to the imbalances, will lead to the recovery being more sluggish than usual. some even consider there could be a more drastic correction that breaks a global upswing in the coming years. those who are more optimistic point instead to the u. s. economy ’ s productivity growth ; if this remains high, there is less cause to be concerned about the imbalances because a higher potential growth rate permits higher incomes with which to service the debt burden. the riksbank ’ s current analysis does not envisage a quick correction of the imbalances. still, there are grounds for supposing that growth in the american economy in the coming years will not be as high as in the late 1990s. and if the imbalances were to be adjusted more quickly, the riksbank would, of course, have to take that into account in the formation of monetary policy. turning now to europe, we see fewer signs of a recovery. the prospects for germany, the largest economy in the euro area, are still uncertain. however, a look at the leading indicators does show that firms have become more positive. imbalances like those in the united states have not accumulated in the euro area and this may benefit a recovery. moreover, economic policy is also markedly expansionary in europe, although the scope for fiscal measures is not as great as on the other side of the atlantic. in addition, an upswing is likely to be held back by product and labour market rigidities. so all in all, it is hard to see how the coming economic upswing can be as rapid as earlier recoveries. but the world economic picture is now appreciably brighter than last autumn and the outlines of an upturn are becoming increasingly clear. inflation in sweden is high if the picture we present in the inflation report holds good, the present cyclical dip in the swedish economy will turn out to have been the mildest for over thirty years. gdp growth was admittedly subdued in 2001 but the figures from statistics sweden do not show any negative rates. neither has the labour market deteriorated as much as usual

. first, if one main objective of this initiative is to strengthen the liquidity of those markets, the financial crisis in particular has shown that there is a lack of liquidity in times of tensions because withdrawals of liquidity by foreign investors are not sufficiently replaced by domestic investment in this country group. bis central bankers ’ speeches a second aspect that calls for clarification and is important not only for lcbms when assessing financial stability is that liquidity was often withdrawn without any great distinctions being made in terms of fundamentals and macroeconomic stability, meaning that open and developed markets can also jeopardise countries that are highly stability - oriented. we therefore also need to be mindful of the extent to which lcbms not only increase the stability of the international monetary system but also contribute to changing the global financial transmission mechanism. broadening the data base remains one of the top priorities. closing data gaps should be a very targeted and cost - effective process. for example, data that have been available only in the form of irregular surveys should be translated into regular, more timely and internationally consistent statistics. the broader support of the g20 can give these data initiatives a significant impulse, in particular in emes. but before raising new statistics, we should first and foremost check whether existing tools can be used to filter out data of relevance to lcbms. the bundesbank ’ s flexible multi - dimensional approach for providing user targeted data on german securities holdings statistics, which currently covers comprehensive microdata for more than a million different securities, is just one example. although the budget constraints for emes expand as they become more integrated into the global savings markets through more developed domestic bond markets, there is no alternative to a credible fiscal consolidation strategy. moreover, it is especially important to prevent a high concentration of sovereign bonds from building up at banks, and to examine whether and to what extent a concentration of this kind may even actually be encouraged by regulation in some emes. in sum and without any doubt, lcbms can significantly help to manage the volatility of international capital flows. bis central bankers ’ speeches