6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Chart 5 Quoted spreads over risk-free rates on  Chart 6 Annual growth rates for mortgage  two-year fixed-rate mortgages  lending and nominal GDP  75% LTV 90% LTV 95% LTV  Percentage points  Mortgages  6  Per cent  20  Nominal GDP 5  15  4 10  3 2  5  1 0 0 -5  -1 2004 06  08  10  12  14  16  1994 97 00 03 06 09 12 15 18  18  Sources: Bank of England, FCA Product Sales Database and Bank calculations. Sources: Bank of England and ONS. Notes: Spreads are taken relative to the risk-free rate of the same maturity. Dashed line is an estimate of historical 90% LTV spreads, which uses rates reported on new mortgages in the FCA Product Sales Database. Notes: Mortgage lending defined as twelve-month growth rate of total sterling net secured lending to individuals seasonally adjusted. Nominal GDP is gross domestic product at current prices seasonally adjusted. Chart 7 UK household debt to income ratio  Chart 8 Percentage of households with mortgage DSRs of 40% or greater  Other  BHPS / Understanding Society Survey  Per cent of disposable income  Consumer credit Mortgages Total (ex.
Thomas Jordan: Repercussions of the financial markets crisis in Switzerland Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the Zuger Wirtschaftskammer, Zug, 28 April 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The turbulence in the financial markets that began in August 2007 is having a generally negative impact on the Swiss economy and is spreading through different transmission channels. The downgraded growth prospects for the US economy are resulting in fewer imports from the rest of the world. Since net exports and the global economic developments are of particular importance for Switzerland, they are having a negative effect, which may be reinforced by the appreciation of the Swiss franc. Because of the major importance of banking in the industrial structure of the Swiss economy, falling turnover on the financial markets can also affect Switzerland more severely than other countries. Moreover, rising credit risk premiums result in higher financing costs for companies, and the deterioration in bank balance sheets could be an additional factor in compromising the availability of credit in Switzerland. Finally, the increase in commodity prices has had a significant impact on the inflation rate in Switzerland. Despite the fallout from the financial crisis, the outlook for Switzerland‘s economy remains good. In Europe – which is crucial for Switzerland – the economy will probably weaken only gradually.