What has been true for Nestlé, Novartis or Swatch - to name just a few - is also valid for the banks: in today’s competitive marketplace, only the fittest will survive, some of them even becoming global players in the process. b)  Professional skills  Secondly, our finance industry has access to a pool of well-educated, highly-skilled, multilingual, and service-oriented workers who are very familiar with international financial markets. Private banking has a long tradition in Switzerland, and financial advisory services to foreign clients have been a part of the Swiss banking business for generations, literally. c)  Efficient financial infrastructure  Thirdly, besides the availability of a highly professional staff, there is the outstanding efficiency of Switzerland’s financial infrastructure. I am referring here to the so-called “Swiss value chain” which comprises a full set of settlement and payment systems, with their individual parts harmonised in an optimum way. The entire facility consists of a trading platform, a payment-against-delivery system, and a central payment system. A fourth component, a central counterparty, is currently being developed. It might be due to their long tradition of watchmaking that the Swiss have developed a skill to build and interconnect sophisticated settlements systems. In 1987, the Swiss National Bank launched the Swiss Interbank Clearing (SIC), the first RTGS system and precursor of many payment systems around the globe. Shortly after, the Swiss Exchange moved from a traditional “à la criée” procedure to an electronic platform including the automatic transfer of securities.

Interpreting exchange rate fluctuations is often very difficult, but the changes in the expectations of the European and US central banks probably contribute to explaining the recent weakening of the krona in relation to the dollar and the strengthening against the euro. 2  BIS central bankers’ speeches  It is difficult to foresee the net result for inflation in Sweden, as that is dependent on both how much the various exchange rates alter and what effects this in turn has on import prices, competitiveness and purchasing power. Factors at home also lead to uncertain conditions for monetary policy International events thus account for many of the sources of uncertainty monetary policy needs to deal with. However, there are also developments at home contributing to the uncertainty over the conditions for monetary policy. One question that we have long been seeking an answer to is why inflation has been lower than we and many other analysts have forecast. The answer is, of course, an important piece of the jigsaw puzzle when putting together the picture of future inflationary pressures. At the Riksbank we have therefore put a lot of energy into analysing the available statistics, and also into interviewing companies about the development of their costs and pricing. The other day we published an Economic Commentary on the subject of company pricing. 1 The responses from 895 companies in the retail trade, construction and various service industries imply that companies have experienced difficulties in passing on their increased costs to consumers.