world war ii baby boom and of ongoing increases in life expectancy. longer life expectancies are certainly to be welcomed. but they are likely to lead to longer periods of retirement in the future, even as the growth rate of the workforce declines. as a consequence of the demographic trends, the number of people of retirement age will grow relative both to the population as a whole and to the number of potential workers. currently, people 65 years and older make up about 12 percent of the u. s. population, and there are about five people between the ages of 20 and 64 for each person 65 and older. according to the intermediate projections of the social security trustees, in 2030 americans 65 and older will constitute about 19 percent of the u. s. population, and the ratio of those between the ages of 20 and 64 to those 65 and older will have fallen to about 3. although the retirement of the baby boomers will be an important milestone in the demographic transition – the oldest baby boomers will be eligible for social security benefits starting next year – the change in the nation's demographic structure is not just a temporary phenomenon related to the large relative size of the baby - boom generation. rather, if the u. s. fertility rate remains close to current levels and life expectancies continue to rise, as demographers generally expect, the u. s. population will continue to grow older, even after the baby - boom generation has passed from the scene. if current law is maintained, that aging of the u. s. population will lead to sustained increases in federal entitlement spending on programs that benefit older americans, such as social security and medicare. the second cause of rising entitlement spending is the expected continued increase in medical costs per beneficiary. projections of future medical costs are fraught with uncertainty, but history suggests that – without significant changes in policy – these costs are likely to continue to rise more quickly than incomes, at least for the foreseeable future. together with the aging of the population, ongoing increases in medical costs will lead to a rapid expansion of medicare and medicaid expenditures. long - range projections prepared by the cbo vividly portray the potential effects on the budget of an aging population and rapidly rising health care costs. the cbo has developed projections for a variety of alternative scenarios, based on different assumptions about the evolution of spending and taxes. the scenarios produce a wide range of possible budget outcomes, reflecting the substantial uncertainty that

speech embargo 24 november 2016, 6. 15 pm negative interest rates : necessary from a monetary policy perspective – but with what risks for the banks? volkswirtschaftliche gesellschaft des kantons bern fritz zurbrugg vice chairman of the governing board * swiss national bank berne, 24 november 2016 © swiss national bank, berne, 2016 ( speech given in german ) * the speaker would like to thank till ebner and adriel jost for their support in drafting this speech. he also extends his thanks to stefanie behncke, toni beutler, robert bichsel, rita fleer, pius matter and oleg reichmann for their valuable comments and to the snb language services for their assistance. page 1 / 10 ladies and gentlemen thank you for inviting me to speak at your annual general meeting. it has become something of a tradition for members of the governing board of the swiss national bank to appear before your society, the volkswirtschaftliche gesellschaft des kantons bern, and i am honoured to continue this tradition. in november 2012, my colleague thomas jordan began his speech by citing a few figures to underline just how much the world had changed since the financial crisis. the swiss franc exchange rate to the euro had fallen from 1. 65 to 1. 20, shortterm interest rates had decreased from 2. 5 % to almost zero, and the yield on ten - year confederation bonds was just 0. 5 %. who would have thought that, four years later, we would be confronted with an even stronger franc and even lower – indeed negative – short and longterm interest rates? these extraordinary developments are ultimately a consequence of the global recession which hit the economy after the credit bubble on the us real estate market burst in 2007. as slide 1 shows, the banks around the world were, and continue to be, especially hard hit by this crisis and its consequences ; since then, their share prices have performed significantly worse than those of other companies. this is principally due to the fact that many banks are still engaged in cleaning up their balance sheets and, where necessary, adopting costly restructuring measures. furthermore, banks have been obliged to implement stricter regulatory requirements in the wake of the financial crisis. these requirements, which are needed to ensure systemic stability, are aimed at curbing excessive risk - taking. from the banks ’ point of view, however, today there are lower potential returns in areas which were previously often lucrative but also