110th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 27.04.2018

The Swiss economy picked up markedly last year against a pleasing global economic backdrop. There were also favourable developments on the foreign exchange markets, with the Swiss franc having weakened since the second half of 2017. There has thus been a reduction in the significant overvaluation, but the Swiss franc nevertheless remains highly valued. Inflation remains low and inflationary pressure modest.

In this environment, the Swiss National Bank (SNB) is continuing to pursue its expansionary monetary policy. The negative interest rate and the SNB's willingness to intervene in the foreign exchange market as necessary remain essential. Tightening monetary conditions would be premature at this juncture, and would risk unnecessarily jeopardising the positive economic momentum that has been established.

In the wake of the global financial crisis, efforts were undertaken at both national and international level to markedly increase the resilience of the financial system with a view to withstanding future crises. On the one hand, the relevant international bodies defined new liquidity and capital adequacy requirements for all banks. On the other hand, systemically important banks must now hold an additional capital buffer and take financial and organisational precautions in case they get into difficulty.

Switzerland's banking sector is of major importance to the country's economy. Efficient and internationally active banks play a key role in this context. A break-up of systemically important banks would therefore not be in Switzerland's overall economic interests, making it all the more crucial that these banks be sufficiently robust. Swiss regulations thus require systemically important banks to hold a larger capital buffer than the minimum standard laid down in the international framework. However, these stricter requirements must not be viewed solely as a cost driver. A robust banking system is a significant advantage for a business location in the face of international competition, and therefore desirable not only in the interests of financial stability, but also from the perspective of the banks themselves. Switzerland has also opted for a streamlined regulatory approach that refrains from actively intervening in banks' business models or organisational structures.

Ten years on from the financial crisis, Switzerland's banking system is clearly more resilient. It is now incumbent on us to complete the implementation of the regulations rigorously. The authorities will of course have to continually review the effectiveness and costs of the regulations going forward.

The new banking regulations substantially reduce the likelihood and severity of any future financial crisis. At the same time, the Swiss regulations will resolve the 'too big to fail' issue. Together these measures will strengthen the resilience of the banking sector, which can surely only benefit our economy and enhance our prosperity.