The SNB will closely monitor the effectiveness of the revised self-regulation. In  1  Federal Council (2019): Bericht des Bundesrates zu den systemrelevanten Banken. www.admin.ch/opc/de/federal-gazette/2019/5385.pdf  Page 2/4  Berne, 12 December 2019 Fritz Zurbrügg  News conference  parallel, it will continue to regularly reassess the need for an adjustment of the countercyclical capital buffer. Climate change and financial stability  Let me now turn to climate change, a subject already addressed by my colleague Thomas Jordan. Climate change can pose longer-term risks to financial stability. There are primarily two ways in which climate risks can affect the financial system. One is through the increase in the frequency and severity of natural disasters with all their consequences, and the other is through changes to climate policy and to the corresponding regulations. It is the responsibility of individual financial system participants to fully understand climate risks relevant to them and to correctly assess the potential consequences from a business perspective – just as with other risks. For its part, the SNB is focusing on how climate risks could impact on the stability of the Swiss banking system as a whole, as well as on systemically important financial market infrastructures. Currently, the SNB considers the likelihood of risks linked to climate change threatening the stability of the banking system as a whole to be low. In the case of financial market infrastructures, climate risks are minimised, for example, by stipulating that technical facilities be distributed over different locations.

FINMA, as the competent authority, is currently checking whether the submitted plans meet this requirement. As for the overall assessment of the ‘too big to fail’ regulations, the SNB shares the Federal Council’s view that the Swiss regulatory approach is consistent with international  Page 1/4  Berne, 12 December 2019 Fritz Zurbrügg  News conference  developments and that no fundamental change to this approach is necessary. 1 At the same time, the SNB also shares the view that there is a need for selective adjustments. This applies in particular to funding in resolution, which is aimed at ensuring that the big banks have sufficient liquidity reserves in a crisis. To this end, together with FINMA and the SNB, the Federal Department of Finance is reviewing whether current liquidity requirements for the two big banks are sufficient to cover estimated funding needs in the event of a crisis, or whether regulatory adjustments are necessary. Domestically focused banks  I shall now turn to the domestically focused banks. There has been little change in their situation since the Financial Stability Report was published in June. Interest rate margins of domestically focused banks remain under pressure and declined further in the first half of the year. Many banks have responded to this challenge in recent years by making efficiency improvements, for instance by digitalising their business processes. At the same time, numerous banks have increased their risk appetite, especially in mortgage lending. This development can also be seen in the course of 2019 to date.