Moreover, life expectancy has grown sharply in the last 45 years, meaning that generally it is now necessary to save for a longer retirement period. The relatively well-financed occupational pension plans in Switzerland – one of the few countries in the world to have a mandatory system – also contribute to the high saving rate. This system helps to accumulate the savings that will be necessary in future to support the growing numbers of pensioners and years spent in retirement. 7 Many countries with ageing populations do not have a comparable system in place. Contributions to occupational pension schemes are currently recorded as savings in the national accounts. This mandatory pension  7  It can be assumed that even more capital will have to be saved in future to maintain occupational pension benefits at their current levels. Page 9/13  system with its high contribution rates thus also influences the high saving rate in Switzerland. The saving rate in Switzerland is at this high level because the Swiss population is rapidly ageing and we have a relatively well-financed pension system compared with other countries. In other words, there is an economically plausible reason why Switzerland has a current account surplus. Against the backdrop of demographic developments, when corrected for statistical distortions, the current account surplus or savings surplus is not excessive but entirely legitimate. I will now turn to the last factor contributing to the persistently high current account surplus, and that is the distinctive industrial structure of the Swiss economy.

Under net labour income, salary payments to cross-border commuters who work in Ticino but live in Milan, for example, are included  2  The special topic in the SNB publication Swiss Balance of Payments and International Investment Position 2016 (pp. 31–38) summarises the methodology for drawing up the balance of payments and the relationships between the main aggregates. Page 3/13  under expenses. The current transfers item comprises, among other flows, expenses of the Swiss Confederation for economic development cooperation. In most countries, the trade balance dominates the current account balance and the other components often contribute very little. 3 By definition, the current account balance also corresponds to the difference between savings and domestic investment in an economy. This relationship is represented in equation 2. 4 If a country has a current account surplus, it is saving more than it is investing domestically. In this case, the surplus capital is exported abroad. By contrast, a country with a current account deficit imports capital from the rest of the world because it is investing more than it is saving. This view – the so-called financial account – is the mirror image of the current account. A country with a current account surplus – or a financial account surplus – accumulates claims (or credits) vis-à-vis counterparties abroad, so-called foreign assets. A country with a current account deficit, on the other hand, accumulates liabilities, i.e. debt visà-vis counterparties abroad, so-called foreign liabilities. The difference between foreign assets and foreign liabilities is termed the net international investment position.