One of the products of the Initiative is a “Statement by Financial Institutions on the Environment and Sustainable Development” (which is appended to this speech). The Statement includes a commitment by financial institutions to contribute towards sustainable development, to adopt a precautionary approach to environmental management and to foster public awareness and communication of their environmental policies. Over 160 institutions have signed up to the statement, but none I regret from Hong Kong, except those which have done so by virtue of being part of international banking groups. I would therefore urge banks in Hong Kong to consider becoming signatories to the Statement, and to BIS Review 108/2000  2  familiarise themselves with the work of the Initiative more generally. You will find that the various components of the work of the Initiative, including annual roundtable meetings, provide much useful practical guidance to financial institutions on how to tackle environmental issues. Secondly, in line with the UNEP Statement referred to above, banks should consider producing a formal environmental policy statement and making this publicly available. Such a statement should represent an acknowledgement by the bank that it must take environmental implications into account in its business operations, decisions and processes. This should include its own use of energy and resources and how it interacts with customers. However, on its own, a policy runs the risk of becoming a “motherhood” statement. Policies should therefore be backed up by management structures and systems, specific objectives, action plans and monitoring procedures to ensure that concrete results are achieved.

Since mid-March, the liquidity supply in the Swiss franc money market has been influenced by the exceptional measures taken to manage the Credit Suisse crisis. The SNB provided ample liquidity to Credit Suisse in the form of interest-bearing loans, which led to an increase in sight deposits. Due to outflows of customer deposits at Credit Suisse, some of this liquidity also reached other institutions in the financial system. This increased the supply of liquidity in the Swiss franc money market. As Thomas Jordan has explained, it was important that the liquidity assistance to Credit Suisse did not influence our monetary policy stance. We therefore consistently continued with our regular monetary policy implementation in the Swiss franc money market. This currently comprises tiered remuneration and the absorption of sight deposits by way of open market operations. To ensure that the secured short-term Swiss franc money market rates do not fall and that they remain close to the SNB policy rate despite the additional liquidity in the Swiss franc money market, we have reduced the increased liquidity supply via open market operations. As you can see from chart 3, we have used SNB Bills and repo transactions with various maturities to accomplish this. Not only our open market operations in the money market but also our foreign exchange transactions have an impact on sight deposits. Since the last monetary policy assessment, the Swiss franc has appreciated by around 2% on a trade-weighted basis. In order to ensure appropriate monetary conditions, we have sold foreign currency in recent quarters.