In 2013, almost one-fifth of global foreign exchange transactions took place in Singapore, Japan, Hong Kong and Australia. While these centres have not yet reached the UK level, they are now almost on a par with the US. Singapore last year supplanted Japan as the world’s third-largest foreign exchange trading centre (righthand side of slide 3).3 Against this backdrop, these markets have understandably gained in significance for the SNB, too, which explains why we decided to open a branch office with eight staff in Singapore in mid-2013. This office is primarily significant from the point of view of investment policy, and to date our expectations on this score have been met in full. Our presence on the ground in Singapore enables us to manage our Asia-Pacific portfolio much more effectively. The importance of being able to operate on the Asian bond and stock markets during local trading hours, for instance, has been confirmed. Our office there also allows us to manage a host of on-site relationships, which deepens our understanding of Asian financial markets – and economies in general. Moreover, having a local presence makes it easier for us to monitor and enforce the minimum exchange rate round the clock, thereby contributing to the implementation of monetary policy. The growing importance of Asia is also reflected in our foreign exchange reserves. As I mentioned earlier, given the enormous increase in our foreign exchange reserves, the  1  World Federation of Exchanges. www.world-exchanges.org, Statistics/Annual Query Tool. 2  Asian Development Bank. 2006 and 2014.

Growing importance of Asia for the SNB’s investment policy In recent decades, the focus of global economic activity has increasingly been shifting towards Asia. The region now accounts for more than a third of global economic output. Asia has contributed more than 50% to global growth over the last decade, with China and India together generating over 40% (left-hand side of slide 2). For Switzerland – a country that is highly export-oriented – Asia has become increasingly significant, too. Swiss companies exported almost CHF 30 billion of goods to the region last year, almost three times more than in 2000, bringing its share to 14% of the country’s total exports (right-hand side of slide 2). Asian countries have made substantial progress in developing their financial markets since the Asian crisis at the end of the 1990s. Most financial markets in the region have become significantly more liquid and diversified than they were 15 years ago thanks to gradual liberalisation of capital flows, better financial market infrastructure and an expanding domestic investor base. Hong Kong and Singapore now rank among the world’s most important financial centres. Between 2003 and 2013, Asian stock markets’ contribution to global market capitalisation increased from approximately 20% to over 30%.1 Bond issues denominated in local currencies have also gained steadily in importance. This market quadrupled in size between 2005 and 2014 and now totals some USD 8,000 billion.2 Equally, Asian financial centres have made substantial inroads into global foreign exchange markets in recent years (left-hand side of slide 3).