The range for this year has been upgraded from June, based on actual data above projections in the first half and more dynamic figures available for thirdquarter demand and output, which are foreseen to continue into the first half of 2011, prompting output gaps to close in this latter period (figure 7). For the year 2011 GDP is expected to grow by 5.5%–6.5%. Moderation of world growth towards 2011, the dissipation of one-time effects of the crisis and 27-F, plus the gradual withdrawal of monetary policy stimulus will result in both output and domestic demand slowing down by the second half of 2011. It is worth noting that y-o-y GDP growth figures in the second quarter of 2011 will be high due to the low basis for comparison associated to the earthquake. Similarly, once the swelling of domestic demand is finished, it should expand next year at a rate the half of the strong growth it should post this year. This will come accompanied with more dynamic export volume growth that will revert the tough 2009 and 2010 years, when exports were affected by the global recession and by the disruptive effects of the earthquake (table 2). The rebound of the Chilean economy is also apparent in a dynamic labor market, where employment is growing strongly and the rate of unemployment has dropped (figure 8).
In France, in December 2012, the Government approved a draft Law on the reform of the banking sector that, among other things, envisages the establishment of an equivalent authority, the “Conseil de la Stabilité Finacière” (CSF). At the Bank of Spain we are also currently looking at the way a Spanish Macroprudential Authority should be set up. Changes in bank regulation Ladies and Gentlemen, I would like to turn now to the changes that have occurred in the regulatory field  BIS central bankers’ speeches  3  The crisis we are still going through was triggered, on the one hand, by the extraordinary loose monetary and financial conditions – and the expansion of credit – of the period between 2000 and 2007. On the other hand, inadequate rules – result of two decades of deregulation, and sometimes bad deregulation – compounded the problem and facilitated high leverage. The Basel capital ratios of the time were low or, in some cases, not applied. There was excessive reliance on internal bank models. The way VaR models were defined by Basel and applied by banks underestimated what we call tail risks, that is, risks associated to events with low probability of occurrence but extremely high cost. Therefore, there was a need for a regulatory response after the crisis. Since the main elements of this response are well known, I will limit myself to a few remarks. First, the response took a predictable pattern: the strengthening of capital requirements, both as regards levels and quality of capital.