news conference berne, 12 december 2019 andrea m. maechler introductory remarks by andrea m. maechler i would like to begin by reviewing developments on the global financial markets, paying special attention to the situation on the swiss franc money market. i will also brief you on how preparations to replace libor are progressing. after this, i will address the importance of climate risks for the snb ’ s investment policy. i will close with a few remarks about the snb ’ s involvement in the new innovation hub being set up by the bank for international settlements. situation on the financial markets economic concerns and political uncertainty have shaped developments on the global financial and foreign exchange markets in recent months. for instance, the tug of war in the us - china trade dispute weighed on investors ’ risk sentiment, especially in the third quarter. interest rates declined significantly around the world during this phase. yield curves flattened markedly. in some countries, long - term interest rates even dropped below the level of shortterm rates. the yield on ten - year confederation bonds fell to a historic low of −1. 1 % in august ( cf. chart 1 ). investor sentiment picked up again from september against a backdrop of monetary policy easing by the us federal reserve and the european central bank and somewhat more favourable economic data. the equity markets benefited in particular from reduced trade tensions in october, with some of the major share indices reaching new highs in november. the swiss market index ( smi ) has gained almost 5 % since mid - year, recently surpassing the 2007 peak by over 12 % ( cf. chart 2 ). in this environment, interest rates recovered slightly from their lows and yield curves also steepened again. however, yields on government bonds issued by countries considered safe by investors have mostly been below mid - year levels of late ; around 28 % of government debt page 1 / 6 berne, 12 december 2019 andrea m. maechler news conference worldwide is still trading at negative yields. in switzerland, the yield on 10 - year confederation bonds recently stood at −0. 5 %, approximately the same level as in mid - 2019. overall, uncertainty dominated the financial markets – a fact that was also reflected in foreign exchange market prices. weaker economic data weighed particularly heavily on the euro, which has depreciated by some 2. 5 % in trade - weighted terms since the end of june. on the other hand, currencies considered safe havens by the markets were able to appreciate

not fundamentally different from other financial risks – they too can trigger or amplify market fluctuations, which influence the attractiveness of certain assets. by opting for broad coverage of entire markets, the snb takes into account the complexity of the many different risks. we regularly review changes in the risk landscape and factor them into our investment policy where necessary. furthermore, as an investor the snb has long had in place a clear set of exclusion criteria for companies that violate switzerland ’ s fundamental norms and values. for instance, it does not invest in companies that systematically cause relevant documents are available on the snb website : www. snb. ch / en / ifor / finmkt / fnmkt _ benchm / id / finmkt _ reformrates page 3 / 6 berne, 12 december 2019 andrea m. maechler news conference severe environmental damage. given the monetary policy requirements of our mandate, we are convinced that the approach we have chosen is appropriate. foundation of the bis innovation hub in october, the snb announced that it was collaborating with the bank for international settlements ( bis ) to establish the bis innovation hub centre in switzerland. this hub centre, which is scheduled to commence operations at the beginning of 2020 alongside the hub centres in hong kong and singapore, will initially focus on two projects. the first will examine the integration of central bank money into a distributed ledger technology infrastructure, with a view to facilitating the settlement of tokenised assets between financial institutions. with respect to integrating digital central bank money, the focus is on two options : an snb - issued digital token for financial institutions ( ‘ wholesale central bank digital currency ’ ) and an interface with the swiss interbank clearing payment system. the project will be carried out as part of a collaboration between the snb and six digital exchange in the form of a proof of concept. the second project will address the growing demands placed on central banks to be able to track and monitor fast - paced electronic markets. we are convinced that the work of the new bis innovation hub will make an important contribution to central banks ’ understanding of developments in the fintech area. page 4 / 6 berne, 12 december 2019 andrea m. maechler news conference charts page 5 / 6 berne, 12 december 2019 andrea m. maechler news conference page 6 / 6