thomas jordan : challenges for switzerland as a financial centre speech by mr thomas jordan, chairman of the governing board of the swiss national bank, at the nzz ( neue zurcher zeitung ) capital market forum, zurich, 3 september 2012. * * * i would like to thank raphael a. auer for his support in writing this speech. i would also like to thank daniel heller, rita kobel and peter kuster for their insightful comments. introduction “ if you see a swiss banker jumping out of a window, follow him, there is sure to be a profit in it. ” this famous saying, attributed to the french writer and philosopher voltaire, has been in circulation for more than two centuries. in recent years, however, the reputation that swiss bankers have for turning a profit under all circumstances has been somewhat tarnished. pressure on the swiss financial centre has been intensifying, due mainly – but not exclusively – to the financial crisis. for banks domiciled in switzerland, doing business and making money has become more difficult. but this is not the first time that switzerland as a financial centre has faced stiff headwinds. throughout our history, swiss bankers have managed to draw the appropriate conclusions, and change course in time. allow me, therefore, right at the outset, to say this : i am convinced that the swiss financial centre will be successful in overcoming the many challenges ahead, and that it will remain an important pillar with regards to the wealth of our nation. the swiss national bank ( snb ) has also faced a number of challenges since the onset of the global financial crisis in 2007. we have repeatedly been forced to counteract the adverse effects of enormous shocks to the swiss economy, in line with our mandate to ensure price stability, while taking due account of economic developments in switzerland. at the current juncture, the economic uncertainty in the euro area, in particular, is of great concern to switzerland and the snb. while we cannot influence the developments in the euro area, we can act in a resolute and timely manner to dampen the negative implications for our country. the most visible measure we have taken is undoubtedly the introduction, almost exactly one year ago, of the minimum exchange rate. in the current situation, a further appreciation of the swiss franc would constitute a very substantial threat to the swiss economy, and would carry with it the risk of deflationary developments. with this in mind, we will continue to enforce the minimum exchange rate with

for transferability may sound trivial, but in practice failure to do so can severely restrict the volume of liquidity assistance available. the snb bases its assessment of solvency on finma ’ s opinion as the supervisory authority. a condition for liquidity assistance is confirmation that the bank is solvent or that a credible resolution plan is available that will restore solvency. these haircuts are based on the mortgage loans after deduction of the respective mortgage clients ’ non - preferred deposits. deposits at swiss and foreign branches of swiss banks and securities firms up to a maximum of chf 100, 000 per depositor are classed as preferred deposits. page 4 / 9 to whom does the snb provide liquidity assistance as lender of last resort? a further important question is who can receive emergency liquidity from the snb. as i said earlier, the rationale behind the role as lender of last resort lies in the very nature of the banking business and the aforementioned achilles heel. bank collapses can lead to financial crises and cause serious harm. the lender of last resort function is therefore aimed at banks. this is in line with the snb ’ s statutory task to contribute to financial stability. until now emergency liquidity assistance has been prepared and regularly tested with all systemically important banks – namely postfinance, raiffeisen group, ubs ( including credit suisse ) and zurcher kantonalbank. the snb is currently expanding the possibilities for obtaining liquidity against mortgages to the whole banking sector. no matter their size, banks can find themselves in a situation where they need significant amounts of liquidity quickly. having started preparations for this expansion in 2019, the snb began the implementation with a pilot project in 2022 and informed the general public in september this year. this expansion will allow the snb to provide liquidity against mortgage collateral to the whole banking sector in the event of liquidity shortages. as mentioned before, a prerequisite for liquidity assistance is that the collateral must be transferable to the snb. if only a handful of banks are involved, this can be individually arranged, implemented and tested. the expansion to cover the entire banking sector calls for a standardised process. mortgage collateral will therefore be transferred digitally and in a standardised format via the electronic six terravis platform. this expansion is open to all banks. the snb expects banks active in mortgage lending to take part in this initiative and prepare mortgages for transfer. broad participation will increase res