4. 4 %. over the same period, annual economic output, i. e. aggregated economic output over four quarters, rose by chf 8. 4 billion from the end of 2012, or an annualised 1. 9 %. this means that, for switzerland as a whole, the already high indebtedness is continuing to grow faster than people ’ s capacity to offset this debt with income. the situation on the residential real estate market has also deteriorated slightly. depending on the segment, real estate prices have risen in real terms by between 2. 6 % and 3. 5 % on average since the beginning of the year. despite a slowing of momentum compared to last year, these growth rates are still high in a historical comparison. in addition, overall, prices for residential real estate have increased more strongly than rents or income since the beginning of the year. there is also no sign of a reversal of domestically focused banks ’ risk appetite. with regard to mortgage lending for owner - occupied residential property, the proportion of new loans with high loan - to - value ratios has decreased slightly. where affordability risks are concerned, however, no such development can be identified. moreover, domestically focused banks remain the driving force behind the strong domestic mortgage growth. while a few individual banks have reined in their lending considerably compared to last year, others have maintained a high level of lending growth, or have even stepped up lending. finally, interest rate risk exposure is extremely high by historical standards, whereas average interest rate margins have narrowed further over the same period. on a positive note, domestically focused banks ’ capitalisation as measured by regulatory requirements remains at historically high levels. however, as discussed in this year ’ s financial stability report, these regulatory capital ratios could be overstating the banks ’ resilience, because the major risks prevailing in the mortgage and real estate markets or the interest rate risk exposure are not, or only partly, taken into account. against this backdrop, banks should – irrespective of the regulatory requirements – continuously assess their resilience, and make adjustments where necessary. they should be able to maintain their economically important functions, even if real estate prices were to fall sharply and interest rates were to simultaneously rise. over the last few years, a number of measures have been taken to reduce the risks to financial stability arising out of developments in the mortgage and real estate markets. the most recent of these measures is the activation, in february this year, of the countercy

standard today, as a result of this commitment to quality. this means that the snb is not under any pressure to roll out a new banknote series quickly. the new series must meet very high security, quality and technical production standards – and will have to do so for at least 15 years after its first release. so it is worth taking the time to ensure that the new security features, which are complex, technologically innovative and have never before been applied to banknote design, can also stand up to the rigours of industrial production processes. a number of tests are currently being carried out. the first denomination in the new series – the 50 - franc note – will not be issued until 2015 at the earliest. we will announce the exact issue date as soon as production of the first banknote denomination has been completed. bis central bankers ’ speeches