That is why I am also fundamentally optimistic about what computer and telecom technology can achieve in time for our country’s economic growth and prosperity. Technological breakthroughs, corporate profits and share prices Now let me consider the other question, namely the part that technological breakthroughs play for corporate profits and thereby for share prices. In the latter part of 1999 and early in 2000 shares were a feverish topic in Sweden — everyone talked about them and how much you could make by speculating in the stock market. The media were full of articles about “How to find the winners” and “How to become a day-trader”. Advisors at banks and stockbrokers waxed lyrical about share investment’s possibilities. Many people who had never owned a share or never even dreamed they would do so were tempted to speculate. Perhaps they needed a little extra money for the summer holiday, a new car or simply more cash for everyday things — why not make a little money easily and quickly, everyone was doing it, to judge from what people were telling each other at work and elsewhere. As though to confirm all this, share prices on the Stockholm bourse rose continuously to new all-time highs, as they did on many stock markets around the world. Shares did best for companies that were  BIS Review 90/2001  3  running at a loss and even needed to issue new shares to cover current operations.
On one hand, banks have been able to gain access to the ECB’s long-term financing under most advantageous conditions thanks to the purpose-built programmes introduced by the ECB. On the other, the public guarantees on loans to firms and the self-employed approved by the Government have contributed to lessening financial institutions’ potential reluctance to take new risks on board in such an uncertain setting. Analyses by the Banco de España based on the evidence available suggest that these guarantee facilities are, in particular, paving the way for the financing both of firms facing greater difficulty gaining access to credit and of small enterprises, marked by having been affected by the impact of the health crisis and for having a greater risk profile. Thanks to the guarantees, SMEs have been able to finance themselves in recent months under more favourable conditions in terms of the interest rate, the amount of credit and, above all, the maturity of the operation, which on average has stood at close to five years. The role of lending to companies in the current crisis is thus proving to be of great importance. It is contributing to reducing the risk of bankruptcy for firms that are viable but which face temporary liquidity problems, with the adverse consequences this would have in terms of job destruction and damage to the productive system, and, in sum, to the robustness and momentum of the economic recovery.