This includes a stability-oriented monetary and fiscal policy, a clear regulatory policy framework with sound institutions, financial stability, and a secure and efficient payments system. The private financial sector plays a key role in developing innovation and employing new technologies to create innovative solutions for its customers. It knows best what companies and end users need and is able to develop effective solutions for them. The private financial sector and the SNB must work together to take the right steps to ensure that innovation can thrive on a sound basis. This requires a shared vision for the Swiss financial centre – a Swiss Payments Vision, as already set out at one of our Money Market Events two years ago. This vision conceives the future of cashless payments in Switzerland as an efficient, reliable and secure ecosystem. In addition, this ecosystem must be fast and  Page 2/11  interoperable in terms of new payment solutions, new technologies, and across national borders. Before we continue looking into the future, let me focus on three principles that are fundamental to confidence in the current payment system, and which will serve as keystones for the further development of Swiss payments. Foundations of confidence in the current payment system The first principle is the close interrelationship between private money and central bank money (cf. slide 1). This interrelationship allows for an efficient division of labour between commercial banks and the central bank, and manifests itself in the two-tier financial system.

One such test – motivated by the risk scenarios identified in the process of monetary tapering in the U.S. – shows little exposure of the banking system to a sharp increase in the interest rates of long-term securities. Meanwhile, households’ aggregate borrowing and financial burden indicators show a marginal decline, although with some changes in the composition of the debt. The share of bank debt has increased compared with other credit providers, while total corporate debt is stable as a ratio to GDP and the financial indicators of companies reporting to the Superintendence of Securities and Insurance (SVS) are also fairly stable. Capital inflows to Chile continue to be dominated by FDI while aggregate solvency and liquidity figures are also stable. In this way, our general analysis of the domestic financial system yields that it is on a good standing to deal with the risk scenarios described, and we see no incubation of systemic risks at the local level. This explains, in part, why the recent volatility episode in foreign financial markets had lesser effects on the Chilean financial system than in other emerging economies, where risks did incubate over the past few years. However, to maintain this resilience the different players making up the financial system must take the necessary decisions and safeguards, especially considering the dynamism of the financial sector. One first firewall, perhaps the most important one, is the one related to corporate stockholders, who should establish and implement clear policies aimed at restricting their operating risks via corporate governance, boards and management.