It is therefore all the more important to set aside sufficient reserves in the years in which we record a profit. The second challenge relates to equity investments. The SNB’s equity portfolio currently amounts to some CHF 100 billion. This comparatively high equity share gives rise to questions on ethics and corporate governance – as it does for other investors. The SNB takes its responsibility as a large equity investor very seriously. It tries to avoid conflicts of interest where possible and has devoted particular attention to questions such as exclusion criteria and the exercise of voting rights, introducing corresponding regulations. In its equity investments, the SNB adopts a passive approach. This means, in particular, that we do not actively engage in equity selection. Otherwise, we could rapidly find ourselves with large corporate shareholdings which, owing to the size of our foreign exchange reserves, might be misconstrued as a strategic participation by the SNB. Our approach ensures that our holdings in individual companies remain as small as possible. We do not invest in equities of international mid-cap and large-cap banks and bank-like institutions in advanced economies. In addition, the SNB does not purchase equities in companies which produce internationally banned weapons, seriously violate fundamental human rights or systematically cause severe environmental damage. Last year, the SNB exercised its voting rights at annual general meetings for the first time, focusing on mid-cap and large-cap companies in the euro area. When casting its vote, the SNB confines itself to aspects of good corporate governance.

In the medium run, investments performance will reflect developments in internal and foreign demand performance. Given the need for a more competitive Albanian economy and its further orientation towards exports, stimulation of investment, increase of production capacities and adoption of more advanced processes and technologies should be priorities of the country’s development policies, in the macro- and micro economic aspects. Public expenditures provided a positive contribution to the aggregate demand of 2011 H1. Following the consolidated behaviour of last year, the fiscal policy was a stimulating one during this period. Public spending increased by 7.4% in annual terms, led primarily by current expenditures, with an added positive contribution of capital expenditures as well. On the other hand, budget revenues were slow, increasing by 1.1% in annual terms. The differences of growth rates for revenues and public spending materialised in the expansion of the public deficit. In GDP terms, budget deficit at the end of 2011 H1 stands at 4.1% or about 1.5 p.p. higher than a year earlier. Expanded fiscal policy was more present during the first quarter of the year, while in the second quarter it was more moderate. Revenue and spending growth rates reduced during the second quarter, leading to the need for the revision of the 2011 budget, in order to retain the parameters of public finance soundness in the short and long run. On the other hand, measures to control budget deficit through reducing public spending implies modelling the fiscal stimulus during the second half of 2011.