foremost in germany – real interest rates are high. they depress the economic outlook and increase the growth differences between the member countries. shares stock markets were characterised by extraordinarily sharp fluctuations and hefty price losses. this was due to risk aversion increasing in the course of the year and the effectively higher risk level, which both depressed share prices. the sharp price swings mirror the difficulty of assessing the risks and opportunities in this environment. the stock market slump has persisted for almost three years now. in the past few weeks, though, all major stock markets have at least witnessed some upward corrections. the long - term expectation that higher yields can be achieved only by taking higher risks has not proven true over a relatively long period of time. unlike shares, low - risk bonds have generated attractive yields during this phase. this experience together with the fact that numerous, notably institutional investors have lost part of their risk capability might, in many instances, result in equity weightings remaining low in the foreseeable future. this change of behaviour will limit the stock markets'growth potential for the time being. at present, the price / earnings ratios of the major stock markets are close to the average of the past 15 years. this indicator suggests that, despite the price losses suffered, shares are not yet particularly low - priced. however, compared with the very low yield level of bonds, which are the most important investment alternative, shares do seem quite inexpensive. does the stock market slump have any adverse effects on economic development? this seems certain for several reasons. for the corporate sector, it has become more expensive to raise capital, which undermines investment activity. although direct shareholding is less common in switzerland than, for example, in the united states, the asset losses incurred discourage private consumption. in many cases, the deteriorated financial position of pension funds necessitates an increase in contributions and / or a decrease in existing premium reductions. such perspectives and occasionally voiced doubts about the reliability of pension promises adversely affect consumption and investors'willingness to take risks. last but not least, the bearish stock markets directly affect the value added by our financial sector, which contributes over 10 percent to gdp. risk management in switzerland and abroad, banks have adopted a more cautious attitude. international institutions, in particular, manage their credit risks much more actively than they used to. they sell some of these risks to other financial intermediaries, including insurance companies and institutional asset managers. the available data do not allow any

on. and third, that resolvability is not a binary concept ; even once the 2022 commitment is fulfilled the work doesn ’ t stop. 2022 will see us pass the important milestone for the resolvability of major banks – but the work to maintain and improve the resolvability of firms within the uk resolution regime will continue. credibility and transparency in the making there are many previous milestones in the history of uk banks ’ resolvability, or lack of it, very few of them positive. with the 2021 budget just around the corner i want to take you back to the april 2009 budget, just under twelve years ago, when, in my role as chief economic adviser to the treasury, i had to advise on the consequences of the deficiencies in the global and uk pre - crisis regulatory framework. by spring 2009, what had started in the summer of 2007 as a liquidity crisis in global financial markets turned into a solvency crisis for a number of global and uk firms, resulting in the uk government bailing out banks and injecting public for more information see the bank of england ’ s written evidence submitted to the tsc ’ s 2017 capital inquiry all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice money to the tune of £137bn to stabilise the financial sector2. the contingent liabilities that the uk government had taken on to support bank funding or to underpin some major banks ’ balance sheets dwarfed that sum. at that time, we saw the very serious consequences of the lack of appropriate focus on the safety and soundness of individual banks and the financial system as a whole, including the absence of a credible resolution regime – by which i mean a regime that sets out our aims, to manage the orderly failure of institutions, accompanied with the tools to deliver them. as a result of these various failings globally and domestically the financial system acted as an amplifier, intensifying the uk economic downturn at great economic and fiscal cost. budget 2009 detailed the largest fall in uk gdp since the second world war and forecast a near doubling in the fiscal debt ratio in just four years, from 36 % of gdp in 2006 - 07 to 69 % in 2010 - 11. in order to underpin the uk ’ s economic and fiscal position, the government took the unusual step, at least in public finance terms as i am sure this expert audience would