It is appropriate to point out, however, that although the method stipulated in the Act on Interest and Indexation is not as beneficial to borrowers with foreign-denominated loans as the continued application of the foreign interest rates set forth in the original loan agreements – which some have demanded – it still improves the position of borrowers considerably, compared to the exchange rate linked loan agreements. Implementation according to the Act on Interest and Indexation therefore represents a compromise: it offers borrowers a more advantageous result than under the original loan agreements while protecting both the public interest and the interests of all debtors and taxpayers, who would have to bear the expense if the most extreme demands of some groups were to be met. The main point is, however, that this approach is enshrined in the law, in the opinion of the supervisory bodies concerned, and is necessary in order to preserve financial stability. BIS Review 91/2010  1  Risk is always present in any nation’s financial system, and it can never be totally eliminated. Uncertainty about the interpretation of this Supreme Court decision represents substantial additional risk. The positive side of the situation is that supervisory bodies, the Government, and the legislature can limit this risk to a considerable extent if they respond appropriately.
There is no escaping the reality of this ongoing structural change if a country wants to maintain its competitiveness over the long term. There have also been increasing calls of late for free trade to be curbed because it is not ‘fair’ for certain countries. In this context, the concept of ‘fairness’ is applied in entirely different ways. It is used in assessing bilateral trading relationships, for example, or in connection with alleged violations of existing trade rules. I would like to briefly address both these aspects. It seems rather odd to insist that trade between two countries can only be regarded as fair if the bilateral balance of trade is in equilibrium. Trade between the actors in these countries is voluntary, and therefore only takes place if all of the participants stand to benefit from the exchange. Such trade is not a zero-sum game in which one side’s gain is the other side’s loss. The view that the trade balance between two countries should be in equilibrium ignores both the reality of global value chains and also the very essence of specialisation. Today semifinished products and intermediate inputs can move back and forward across national borders 3 4  Cf. Autor et al. (2016), for example. Cf. World Trade Organization (2017), for example. Page 3/9  many times before the end product is complete. Simply netting bilateral trade flows is no basis for judging whether trade is fair or not.