jean - pierre roth : switzerland - small, but global speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the swiss chinese chamber of commerce ( swisscham ), beijing, 10 june 2005. * * * i am pleased to be a guest here today at the swiss - chinese chamber of commerce and speak a few words to you. i am sure it is not necessary to convince any of you of the importance of globalisation and trade. you are living proof of our export sector ’ s dynamism and willingness to adapt to changing circumstances. by your presence in china, you contribute not only to our country ’ s influence abroad, but also to the expansion of its economy. as you know, economic globalisation often gets bad press in switzerland. some of our fellow citizens condemn it, hoping that barriers to delocalisation might strengthen the situation on our labour market. but let ’ s not be led astray by these scaremongers! those who succumb to those fears fall victim to an illusion. a policy of inactivity is not synonymous with consolidation, but with decline. it is important to realise that swiss investment abroad, particularly in low - wage countries, secures the high added value jobs we have at home. as a small country, we therefore have no other choice but to trade with the rest of the world if we want to prosper. this means that we will be continuously faced with the challenge of international competition. nevertheless, for many observers, switzerland remains a tiny spot on the european map, a country of 7. 5 million inhabitants completely surrounded by the european union whose population has already grown to several hundred million. our geographical position obviously puts the question of joining the european union squarely in the centre of often heated debates. for our economy, however, the real challenge is not to become more european, but to open up further to global markets. today, switzerland is more than merely a quaint little country for tourists ; it is not only home to watchmakers and bankers or trains that run on time. this cliche is a thing of the past. switzerland today is a global production platform with 4 million jobs within its borders and 1. 8 million people working in swiss companies abroad. this ratio is unique for an industrialised country. it is the result of a long tradition of switzerland ’ s presence abroad. we are all familiar with the big names in our industry which, as early as the beginning of

philipp m hildebrand : financial stability and hedge funds : effective and ineffective supervision speech by mr philipp m hildebrand, member of the governing board of the swiss national bank, diskussionsforum « nachbarn deutschland - schweiz : impulse fur die zukunft », berlin, 9 november 2005. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * the hedge fund industry has grown rapidly over the past few years and it has become an important segment of global financial markets. the possibility to use leverage and a high degree of flexibility are key elements of a broad range of investment strategies which have made the hedge funds industry very profitable. hedge funds have been an important source of innovation in the traditional asset management industry and they have rendered financial markets more liquid, more efficient and more flexible. nonetheless, the rapid growth of the industry and the excessive use of leverage may result in potential systemic risks which are relevant to central banks, unlike prudential matters. overall, industry leverage is difficult to measure. however, several studies suggest that it is lower than at the time of the near collapse of ltcm in 1998. even so, temporary excessive levels of leverage with single hedge funds can not be ruled out completely. a crisis in the hedge fund industry might therefore spill over to their primary trading partners, the major investment banks. hence, regulation and supervision in order to minimize systemic risk should concentrate on the leading global investment banks to make sure that adequate counterparty and liquidity risk management systems and processes are implemented. against the backdrop of scarce resources, we should refrain from opening new regulatory fields which are not relevant for systemic risks. 1 / 1