is probably the best solution for us. in short, our relationship to europe is well organised and established. at this point, one specific question often arises : if we are so well integrated, why don't we peg the franc to the euro instead of pursuing an independent monetary policy? wouldn't this help eliminate the exchange rate risk, without giving up monetary flexibility entirely? the answer is that there is no certainty that a peg would engender the foreign exchange stability that exporters sometimes dream of. we have learned from our experience with flexible exchange rates that any explicit foreign exchange target stimulates the appetite of speculators instead of calming the situation. and this would be especially true if our pegging decision were to be taken unilaterally, without the prospect of a full and permanent integration into the euro area. today, with global markets and global speculation, it is an illusion to believe that a central bank can defend a specific exchange rate target. the only exception would be if the economy whose currency serves as the peg were strongly convergent with the domestic economy. furthermore, a nominal peg against the euro would do little to stabilise the real value of the swiss franc – the only thing that matters for the international competitiveness of the swiss economy – or to stabilise the franc vis - a - vis third currencies, especially the us dollar. last but not least, switzerland enjoys the lowest interest rates in europe. this situation has nothing to do with the appeal of our bank secrecy, as many believe, but with the abundance of savings and the high degree of price stability. since the introduction of the euro in 1999, the average interest rate on three - month swiss franc deposits – 1. 4 % – has been less than half the rate for euro deposits. if switzerland were to give up its monetary independence by pegging the franc to the euro or by joining the euro area, swiss interest rates would increase to european levels. since higher interest rates mean lower asset prices, lower levels of investment, and also higher mortgage rates, the swiss are, understandably, not keen on giving up their national currency. a major decision of this kind would have to be approved in a public referendum in switzerland ; the prospect of eu and euro membership in the near future is thus highly unlikely. conclusion having chosen the option of free trade and free movement of capital, switzerland is, in many respects, better prepared than others to take advantage of the greater opening of borders

niklaus blattner : system stability and security of the systems summary of a speech by prof dr niklaus blattner, vice - chairman the governing board of the swiss national bank, at the luzerner tage fur informationssicherung ( lutis, conference on information security ), lucerne, 25 may 2004. the references for the speech can be found on the swiss national bank ’ s website. * * * the stability of the banking system and the security of the financial market infrastructure - including the stock exchanges and especially payment and securities settlement systems - have become an important concern of central banks all over the world in recent years. this has notably happened against the background of the numerous financial crises witnessed during the past decades. moreover, events such as 9 / 11 have heightened awareness for the security of the financial markets and other infrastructures. in switzerland, the growing importance of system stability has also been reflected in the new national bank act, which entered into force on 1 may 2004. within the framework of its principal mandate of pursuing a monetary policy in the interests of the country as a whole while at the same time ensuring price stability, the swiss national bank ( snb ) is legally obliged to make a contribution to system stability and to facilitate and secure the operation of cashless payment systems. in implementing its mandate, the snb takes preventive measures as well as measures aimed at overcoming crises. for instance, in a crisis the national bank plays an important role in providing liquidity. with the new act, the snb specifically bears the responsibility of overseeing the systemically important payment and securities settlement systems. the operators of such systems will in future have to meet certain minimum requirements, which will also include requirements with regard to information security. secure and reliable information and communications structures are an essential precondition for the smooth functioning of the financial system. in the context of its mandate, the snb limits itself to systems - relevant aspects in these areas. systems - irrelevant problems concerning individual banks or payment systems, by contrast, are explicitly not a part of its mandate. this is based on the conviction that the problems in the financial system must be solved by the market itself whenever possible.