In particular, it is important that the measures are first and foremost designed to correct false incentives and to guide them in the right direction so that, first, unprofitable financial institutions leave the market of their own accord and, second, potential losses are borne by these institutions themselves, and not by the state. Consequently, in my opinion, measures such as a ban on proprietary trading or the introduction of a narrow banking system, that intervene too strongly in banks’ business models, are not very suitable. Such measures neither target the objective nor are they in line with the basic principles of the market economy. With regard to the TBTF issue, this principle has prompted the committee of experts appointed by the Swiss Government to draw up proposals including the creation of incentives for banks to become less systemically important overall, thereby reducing potential costs for the economy. At the same time, the committee of experts’ proposal will allow for improved resolution in the event that insolvency appears imminent, and this will significantly alleviate the TBTF problem. Are the measures “structural”? A second criterion is that the measures should not just address the specific circumstances of the most recent crisis. In other words, fighting the last war will not win the next one. At the same time, the lessons of history show us that certain basic mechanisms repeat themselves in every crisis. Consequently, it is very important that we recognise these general patterns and include them in regulatory considerations in order to improve our crisis prevention.
Specifically, industries manufacturing and selling consumer and investment goods have increased their financial flows above pre-pandemic levels. In contrast, sectors producing intermediate goods (that is, intended for further processing) and many consumer service industries are still to restore their financial flows and business activity. If we estimate the year 2020 in general, GDP will decline by about 4% owing to high performance in Q3. The economy bounced back significantly in response to the easing of restrictions and support measures. It is also worth noting that, amid limited opportunities to travel abroad this year, households kept over 1.5 trillion rubles earlier spent for outbound tourism. In 2020, these funds could partially be saved, but a portion of this amount was spent in Russia, propping up domestic demand. Fiscal measures provide significant support to the economy. This year, budget spending increased by over 14% against 2019. 2/4  BIS central bankers' speeches  Recovery growth is expected to resume steadily in spring 2021. Given the economic situation and price movements, the ratio of proinflationary and disinflationary factors and risks has altered considerably. Indeed, demand trends, especially amid the drastic aggravation of the epidemiological situation, continue to contain price growth. However, this impact is currently offset by the above-mentioned proinflationary factors. As I have already said, we will assess whether these factors become steady against the backdrop of increased inflation expectations.