. at the beginning of the 1990s, the erstwhile closed - off states of the eastern bloc gradually began to open up, and so too did china and other asian countries. since then, economic integration worldwide has been considerable. today, the value of goods and services traded internationally is three and a half times higher than it was then. average real per capita income worldwide has increased by two thirds. the proportion of the world ’ s population living in extreme poverty has fallen from just under 40 % to 10 %. this rapid improvement in prosperity was made possible by the better use of the three factors needed for growth : labour, capital and technology. 1 / 5 bis central bankers'speeches after 1990 we saw an increasingly international division of labour. countries specialised in areas where they were particularly proficient compared with their trading partners. the manufacture of labour - intensive products was outsourced to countries with relatively low wage levels. this increasing division of labour resulted on the one hand in rising incomes, above all in the new production countries, and on the other hand in a decline in goods prices worldwide. this effect was strengthened further by international competition. with increasing economic integration, capital, the second factor influencing growth, could be invested globally. foreign direct investment and loans helped in the construction of production facilities and infrastructures in the newly opened regions of the world. the high levels of savings in the advanced economies were thus put to productive use in the catch - up growth of these regions. that leaves the third factor : technology. the integration of the global economy led to a massive transfer of knowledge between countries, which greatly accelerated the economic development of the poorer nations. furthermore, the growth in the number of people participating in the global economy meant that there were a lot more ideas and innovations. more ( and more highly specialised ) workers, better and more broadly invested capital and a rapid exchange of knowledge – all this led to higher economic growth and greater prosperity worldwide. globalisation also had a major impact on monetary policy. the most important change in this respect was the increasingly global production of goods, which reduced inflationary pressure. the latter also fell because the global economy was able to satisfy increases in demand in individual countries comparatively easily. in the less integrated economy of the cold war era, higher demand quickly led to bottlenecks and rising prices. with inflationary pressure lower, central banks were able to react more strongly to adverse economic developments. and this was often appropriate, in retrospect. for the global integration of the financial

thomas jordan : what are the consequences of the war in ukraine for the snb's monetary policy? speech by mr thomas jordan, chairman of the governing board of the swiss national bank, at the 114th ordinary general meeting of shareholders of the swiss national bank, berne, 29 april 2022. * * * madam president of the bank council dear shareholders dear guests i would like to warmly welcome you all to our annual general meeting, and i am delighted that this year we are able to meet in person again. the geopolitical situation has changed fundamentally in the past few months. russia ’ s attack on ukraine has shaken us all. our thoughts are with the victims of this terrible war. considerations of the economic consequences pale by comparison with this suffering. nevertheless, such deliberations are also important for the citizens of switzerland, and the swiss national bank is therefore working intensively on addressing the impact the war will have. on the one hand, we have to properly contextualise the immediate economic effects. on the other hand, we also have to address questions pertaining to the longer term. i will begin my speech by looking at the closely interconnected global economy as we knew it until just recently, the gains in prosperity it brought, and what it meant for monetary policy. i will go on to explain how the consequences of the war that can already be felt are influencing our current monetary policy. i will then discuss the other side of global economic integration, namely the interdependencies between countries and markets. at the end of my remarks, i will offer some thoughts on what is likely to change with regard to monetary policy if global economic integration were to decrease again as a result of the war. monetary policy in an integrated global economy the world has become increasingly interconnected economically over the past decades. until a short while ago, we thought these ties would continue to become closer. the us - china trade dispute of recent times had already cast some doubt on the durability of global integration. the coronavirus pandemic has restricted mobility and strained global supply chains. however, the geopolitical confrontation we see today has an entirely different dimension. russia ’ s invasion of ukraine has reopened old rifts in many respects. we therefore have to ask what the consequences would be if the economic fragmentation already caused by the war were to persist, or even increase further? to assess this, i would first like to look briefly at the process of globalisation over the past thirty years or so