Browsing by Subject "corona"

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  • Bank of Finland (2020)
    Bank of Finland. Bulletin 5/2020
    The global economic crisis caused by the coronavirus pandemic intensified in March 2020. The health crisis and the lockdown measures necessary to contain the epidemic led to an exceptionally sudden and sharp decline in output worldwide in the first half of the year. In 2020 as a whole, the global economy is expected to contract by about 4–6%, and the euro area economy by about 8–10%. The euro area economy would seem to be diving a little deeper this year than the United States, but the pace of recovery is very uncertain for both. China saw the most difficult phase of the epidemic and thus the sharpest economic contraction in the first quarter of 2020. China’s recovery has been facilitated by the production and export of remote work equipment and protective equipment for the coronavirus disease. The pandemic shock has had a dampening effect on inflation. Unemployment is on the rise, but the euro area has avoided sudden mass unemployment through furloughs and government aid.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 5/2020
    The worldwide economic crisis caused by the corona pandemic peaked in March 2020. In the early part of the year both output and consumption contracted suddenly and strongly; in other words, goods and services were both produced and consumed considerably less than before. The global economy is forecast to contract in the current year by around 4–6%, and the euro area economy by around 8–10%. Prior to the corona crisis, in 2019 the economy grew 2.9% globally, and 1.3% in the euro area. In the current year, the euro area economy would appear to be diving slightly deeper than the US economy, but the pace of recovery for both is very uncertain. Unemployment is growing, but in the euro area sudden mass unemployment has been avoided through the deployment of furloughs and various support measures.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 3/2020
    The Finnish economy is experiencing a sharp contraction on account of the coronavirus pandemic. Gross domestic product will decline by around 7% in 2020. In the next 2 years, the economy will grow around 3% per annum. The forecast contains an exceptionally large degree of uncertainty. The contraction in the economy in 2020 could be only 5% or as much as 11%, depending on how the epidemic progresses in Finland and around the world, and what success there is in bringing it under control. The degree of success in controlling the epidemic will also determine how quickly the economy will recover. It will probably not be possible to avoid permanent losses of output, but economic policy can be used to mitigate their scale.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 2/2020
    The corona crisis has impacted negatively on the Finnish economy and on the country’s banks and their customers in a number of ways. The banks now need to deploy the financial buffers they have been accumulating since the global financial crisis just over a decade ago. By granting new loans and amortisation holidays, the banks can for their part help businesses and households survive the acute phase of the current crisis. At the same time, banks must prepare for an increase in loan losses from previously granted loans.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 6/2020
    The economic recession caused by the pandemic has so far been milder in Finland than elsewhere in the euro area, but the coming winter will still be difficult. Vaccinations do, however, bring hope of an end to the crisis, both in Finland and around the world. COVID-19 will gradually be left behind in the course of 2021 due to the vaccines, and household consumption will drive growth of 2.2% in the Finnish economy. This will strengthen to 2.5% in 2022. At the end of the forecast period in 2023 the economy will be growing only slowly, as the conditions for growth in the Finnish economy in the long term are weak.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 4/2020
    Monetary policy implementation in recent years has largely centred on asset purchase programmes and long-term refinancing operations. As a result, the balance sheets of the Eurosystem national central banks have grown significantly, while balance sheet risks related to monetary policy implementation have increased.
  • Miettinen, Paavo; Saada, Adam; Tiililä, Nea; Vauhkonen, Jukka (2020)
    Bank of Finland. Bulletin 2/2020
    Stricter capital requirements since the global financial crisis have improved the ability of banks to lend and absorb losses in a crisis situation like the coronavirus pandemic. A robust lending capacity is now needed to finance fundamentally sound Finnish companies with liquidity needs. It must be ensured that banks are well-capitalised to withstand future loan losses.
  • Kaaresvirta, Juuso (2020)
    Bank of Finland Bulletin. Blog
    Tensions between China and the United States have once more been on the rise. The US has heavily criticised China about its handling of the coronavirus pandemic, cyber security violations, and has tightened the screws on Huawei. Trade has also come back into the discussion after the truce made during the winter, when the countries signed the Phase One trade agreement on 15 January and agreed to reduce some of the additional tariffs.
  • Mäki-Fränti, Petri; Vanhala, Juuso (2020)
    Bank of Finland. Bulletin 3/2020
    The corona pandemic and the related lockdown measures have led to a strong contraction in business turnover and weakening of profitability, particularly in the service industries. If the profitability crisis persists, it will turn into a liquidity crisis and the risk of corporate bankruptcies will increase. Companies can, to some extent, adjust to the decline in turnover by cutting costs, for example by decreasing purchase volumes and by negotiating reductions to other cost items, such as rents. With the help of temporary lay-offs, companies can even adjust staff expenditure rapidly, if necessary.
  • Lindblad, Annika; Silvo, Aino (2020)
    Bank of Finland. Bulletin 3/2020
    Consumer confidence indicators are widely used in monitoring the economic cycle, as they are thought to contain forward-looking information on the path of the economy. Changes in consumer confidence have historically preceded shifts in the economic cycle by about six months. The value of forward-looking indicators is highlighted especially during exceptional inflection points in the economy, such as during the financial crisis or the currently prevailing coronavirus crisis, as these indicators provide readily available information about the future path of the economy. The rebound in consumer confidence and the recovery of the economy appear to be intimately connected.
  • Koskinen, Kimmo (2020)
    Bank of Finland. Bulletin 2/2020
    Expectations of a deteriorating economic outlook increased the risks to banks’ operating environment even before the coronavirus pandemic spread to Europe. At the end of 2019, banks’ return on equity was 5.2%, compared with 6.2% a year earlier. While some banks were experiencing profitability challenges already prior to the outbreak of the pandemic, profitability also differs greatly between countries, bank business models and individual banks. Due to the coronavirus pandemic, banks’ income development will further deteriorate, and it is likely to fall well below banks’ imputed cost of equity. The effects of the pandemic are widely reflected in the stock prices of European banks (Euro Stoxx Banks Index), which have fallen by 40% since the beginning of 2020.
  • Rehn, Olli (2020)
    Bank of Finland. Bulletin 6/2020
    Economic policy in Finland must now find a way to live in two time periods at once. While we are currently combating an acute crisis, we must at the same time direct our thinking strongly towards the economic challenges of the post-crisis years. It is essential to both support businesses, households and economic recovery, while at the same time strengthening the conditions for sustainable, balanced economic growth and improved employment in the years ahead.
  • Välimäki, Tuomas (2020)
    Bank of Finland. Bulletin 4/2020
    The coronavirus pandemic has brought monetary policy operations back into the spotlight, as central banks around the world have taken up new monetary policy measures. We too at the Eurosystem have swiftly launched new measures which support price stability and growth and employment in the euro area.
  • Rehn, Olli (2020)
    Bank of Finland. Bulletin 5/2020
    The lockdown measures introduced to contain the global health crisis posed by the coronavirus pandemic led to a sharp contraction in economic activity during the second quarter of 2020. The world economy has already entered a fragile recovery, but one that will take a long time.
  • Rehn, Olli (2020)
    Bank of Finland. Bulletin 3/2020
    The corona pandemic serves as a reminder that healthy public finances provide an irreplaceable shield when we hit hard times. It is now important to both time and target the fiscal policy stimulus effectively and take forward structural reforms. Finland’s labour market, too, has a vital role to play as the economy enters the recovery phase.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 3/2020
    The Finnish economy is experiencing a sharp contraction on account of the coronavirus pandemic. Gross domestic product will decline by around 7% this year and grow around 3% per annum in 2021 and 2022. The forecast contains an exceptionally large degree of uncertainty. According to alternative scenarios, the contraction in the economy in the current year could be just 5% or as much as 11%, depending on how the epidemic progresses in Finland and what success there is in bringing it under control. The degree of success in controlling the epidemic will also determine how quickly the economy will recover. It will probably not be possible to avoid permanent losses of output, but economic policy can be used to mitigate their scale.
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 6/2020
    COVID-19 will gradually be left behind in the course of 2021 due to the vaccines, and private consumption will generate growth of 2.2% in the Finnish economy. This will strengthen to 2.5% in 2022.
  • Rehn, Olli (2020)
    Bank of Finland Bulletin. Blog
    The European Commission, on Wednesday, published its proposal for a European recovery fund to help restart the economic engines in a Europe shaken by the coronavirus. Finnish debate seems to be focusing on the risks and liabilities related to the recovery fund, which are, indeed, important issues. However, less attention has been given to the objective of the fund. Rather than a partial assessment, would not a comprehensive assessment be needed as a basis for decision-making?
  • Ilmanen, Matti (2020)
    Bank of Finland. Bulletin 4/2020
    The expanded asset purchase programme was introduced in 2015, when Eurosystem interest rates began to reach their lowest threshold. Bond purchase programmes have become one of the most significant approaches to monetary policy. This article explains how the Bank of Finland itself implements monetary policy purchase programmes within the Eurosystem.
  • Herrala, Niko (2020)
    Bank of Finland. Bulletin 4/2020
    The monitoring of financial markets is an important part of the preparation of monetary policy decisions and the monitoring of their implementation, as information from the financial markets provides clues on the state of the economy and financial conditions. Crises emphasise the importance of financial market surveillance, as emerging problems in the economy and the financial system are usually first reflected in the financial markets.