For example, according to the European Investment Bank Investment Survey, the share of EU firms putting effort into shortening their supply chain increased from 10% in 2021 to 20% in 2022, while that increase was from 20% to 30% in the US. And around 40% of German companies are trying to reduce their dependence on Chinese inputs. This increased security is likely to lead to less risk-sharing capacity between countries and higher transaction costs. Third, to the extent that international trade is negatively affected by geopolitical factors, a trend towards regionalisation will also emerge, as a mechanism to continue to enjoy the benefits of globalisation but on a smaller scale. As an illustration, in 2022, 44% of global companies were developing regionalised supply networks (up from only 25% in 2021). Evidently, some of the above-mentioned trends may well imply a further slowdown of the globalisation process beyond that observed in recent years, or even result in deglobalisation pressures. The EU response In response to these challenges, the EU has recently been launching a series of policies within the so-called Open Strategic Autonomy agenda: an emerging set of regulatory, structural and fiscal policies that seek to address the EU’s economic vulnerabilities arising from geopolitical considerations. Under the framework of Open Strategic Autonomy, three types of policies have been proposed to reduce the EU's vulnerabilities. A first set of measures aims to assess supply chain dependencies and vulnerabilities and increase the resilience of the European industrial system.

The offensive component of a comprehensive Swiss strategy must be an unequivocal commitment from politicians, regulators and financial sector representatives to competition and free markets. Such a commitment will foster innovation which will ensure the long-term viability of Switzerland as a leading global financial center. A commitment to competition includes a firm commitment to an effective regulatory system based on transparency, proportionality, predictability and an uncompromising fight against abuse. Such a regulatory framework does not stand in opposition to a commitment to free markets. To the contrary, it strengthens free markets by upholding the integrity of markets. Regulatory authorities must not loose sight of the primary aim of regulation: to uphold the integrity of markets and not to impede the functioning of markets. Let me conclude my brief formal comments with a specific example of how innovation in the face of global competitive pressures can foster the viability of the Swiss financial center. In recent years, hedge funds have become an important segment of the global asset management industry. Recent figures indicate that total assets invested in hedge funds are approaching the USD 1’000 billion mark. In comparison, the total size of the open-end mutual funds industry in the United States is USD 7’500 billion. According to industry figures, the annual growth rate of the hedge fund industry appears to have accelerated to a level in excess of 15% in recent years. These figures suggest that investors increasingly look for largely unconstrained investment activities with a focus on absolute return.