news conference berne, 15 december 2016 fritz zurbrugg introductory remarks by fritz zurbrugg in my remarks today, i will start by presenting our current assessment in the area of financial stability, looking first at the big banks before turning to the domestically focused banks. i will end my remarks with a few words on the new banknote series. big banks since the financial stability report was published in june, the swiss big banks have improved their capital situation slightly ; at the same time, they have substantially increased their holdings of bail - in bonds. bail - in bonds are debt instruments that can be written off or converted into equity in the event of restructuring or resolution. they form the basis for a crisis - hit bank to be resolved or restructured in an orderly way. alongside capital requirements, the qualitative and quantitative requirements on such debt instruments are a key component of the revised ‘ too big to fail ’ regulations which came into force at the beginning of july. these revised regulations envisage that the requirements will gradually be increased to the specified level over a phase - in period ending at the beginning of 2020. as regards core capital ( common equity tier 1, cet1 ), both big banks already largely meet the targets that will apply after the end of the phase - in period. there is still a need for action before the transition deadlines expire, as regards bail - in instruments and high - trigger contingent convertible capital instruments – or high - trigger cocos. these cocos can be converted into cet1 equity or written off in order to absorb losses in current operations. when accumulating the necessary bail - in instruments and high - trigger cocos, banks have the opportunity to replace existing instruments with the required higher - quality instruments. the further strengthening of resilience through the accumulation of high - trigger cocos, as foreseen by the regulations, is important and necessary. one reason for this is the big banks ’ loss potential, which continues to be substantial relative to their capitalisation. given their page 1 / 3 berne, 15 december 2016 fritz zurbrugg news conference significance to the swiss economy, it is important that the big banks remain adequately capitalised, even in the event of such losses occurring. a second reason is the critical assessment by the markets as regards the resilience of banks, both in switzerland and worldwide. by strengthening their resilience, banks can convince the markets of their soundness. the likelihood of share price

bruno gehrig : moving among currency giants – a swiss perspective speech by prof bruno gehrig, vice chairman of the governing board of the swiss national bank, at the swiss - american chamber of commerce, zurich, 16 january 2001. * * * first of all, i should like to thank you for the pleasure and delight of being invited to speak to you today. at the same time, i should like to emphasise how much i appreciate the exemplary and highly successful activity of the swiss american chamber of commerce. your organisation plays an invaluable part in the economic, political and - most important of all - in the personal relations between us and swiss citizens. in my speech entitled " moving among currency giants " i should like to outline a few ideas under four different headings. i shall start out with a few remarks on the system of floating exchange rates, which we have more or less learned to live with since 1973, the time of the breakdown of bretton woods. this will be followed by some considerations on the always topical subject of short - and medium - term currency movements. after this bird's eye view of general developments, the frog perspective will be highlighted. i will deal with the special features of our small currency, and end by drawing a few conclusions for the snb's monetary policy. floating exchange rates : perception and experience views on how floating currencies behave and what the implications of their implementation are have changed over the past 30 years, in the light of current experience. early protagonists had fairly idealistic expectations with respect to floating. for example, harry g. johnson, one of the grand old men of international economics, when he stated hopefully years ago : " a freely flexible exchange rate would tend to remain constant so long as underlying economic conditions ( including government policies ) remained constant : random deviations from the equilibrium level would be limited by the activities of private speculators … " 1 this optimistic view was based on two convictions. for one, on the notion that exchange rate distortions are primarily triggered by inconsistent government policies oriented to short - term effects. in actual fact, the economic developments of the late sixties and of the seventies promoted the perception of a fundamental contrast between inherently stable private markets and a destabilising public policy sector. on the other hand, most economists were profoundly convinced that free exchange rate movements would be clearly dominated by inflation differentials with no lasting impact on real exchange rates. it must be borne in mind, however, that