The depreciation largely occurred over a few days at the end of July, but the downward trend – broad-based across the market and founded on good market quality – continued over the following months. Overall, the situation on the foreign exchange market remains fragile, however. Despite the positive market environment, the Swiss franc has not weakened any further in recent weeks. The risk of renewed Swiss franc appreciation remains, particularly if there is a return to risk aversion in the market. A look at the option markets shows that investors are still prepared to pay a higher premium to hedge against Swiss franc appreciation than against its depreciation (cf. chart 4). Progress made in reforming reference interest rates  Let me turn now to reference interest rate reform. The Financial Conduct Authority (FCA) in the UK announced in July of this year that it would not guarantee the continuation of Libor beyond 2021. The reason for this is that the volume of money market transactions underlying Libor – unsecured interbank loans – has been low for a number of years. The FCA will exercise its power to compel panel banks to take part in the Libor panel only until the end of 2021. After that, the possibility of Libor disappearing fairly quickly due to the withdrawal of panel banks can no longer be excluded. The period until the end of 2021 should now be used by market participants to ensure an orderly transition from Libor.

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