The yield on long-term bonds in Swiss francs is also around two percentage points below that on corresponding euro paper. This has lowered the attractiveness of the Swiss franc somewhat compared with the euro. The stabilisation of the euro/Swiss franc relationship – albeit at a relatively high rate for the Swiss franc – is a positive development. Experience has shown that the exchange rate development has a significant influence on business activity in Switzerland. We are still determined to counteract any additional upward trend of the Swiss franc that might jeopardise the economic recovery. BIS Review 73/2002  1  Bonds In the capital markets around the world, nominal yields dropped considerably (see graph). However, borrowers with medium and low credit ratings did not benefit much from this development as credit risk premiums rose during the year. This also limits the macroeconomic stimulus effect of the yield decline. In addition, real interest rates did not decrease to the same extent because simultaneously inflation expectations again subsided markedly. Particularly in the euro's core countries – first and 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.
Hence, it is clear that not only are the present day poor nations struggling in the emerging, highly complex and controlled economic environment, they are also facing reduced resource transfers, and not being accorded special treatment they should be afforded in order to propel them out of poverty. Some may however argue that the tremendous benefits of globalization has levelled the playing field and that advantages are available to any and all who care to access, and it is just unfortunate if some persons are unable to take advantage of these conditions. Nevertheless, I believe we are all aware that weaker communities have lesser chances of access and that situation leads to widening even further, the ever-widening gap. Therefore, it is timely and appropriate that this forum addresses the need to impress upon the more wealthy nations to increase aid flows, open out greater trading opportunities, and move towards higher investment and resource build-up in the lower income countries. Lest I be misunderstood, let me add that, not for a moment am I suggesting that the progressive steps the world and the international community have taken over the past few decades in developing new standards and norms are in any way, inappropriate or unwelcome. Those initiatives were certainly necessary and have been beneficial for the overall advancement of society.