head of population of any country – triple those of germany and quintuple those of the us ( left - hand side of slide 8 ). the snb ’ s gold reserves have remained constant in recent years and it has no plans to sell its holdings. the value of our gold reserves has thus moved in line with the gold price in recent years ( right - hand side of slide 8 ). however, given the substantial increase in the snb ’ s foreign exchange reserves since 2009, the share of gold as a percentage of total currency reserves has indeed changed, recently falling to just below 8 %. now let us turn to the gold initiative, which goes to the vote in just a few days. the supporters of this initiative are demanding that the snb hold at least 20 % of its assets in gold and at the same time requiring a ban on ever selling gold again. moreover, the initiative demands that the gold must be stored exclusively in switzerland. in order to achieve the share of 20 %, the snb would have to almost triple its gold holdings within five years. in practice, given today ’ s balance sheet total and gold price, the snb would have to purchase bis central bankers ’ speeches around chf 70 billion worth of gold – around two - thirds of the world ’ s total annual gold production. the snb considers the initiative to be unnecessary and harmful. its legal mandate is to ensure price stability. in a system of flexible exchange rates, gold is no longer required for it to perform this function and the gold initiative is therefore unnecessary. price stability and the stability of the swiss franc are not determined by the share of gold in the snb ’ s balance sheet, but by its monetary policy. it has achieved these goals more effectively than virtually any other central bank : average inflation has remained below 1 % for the last 20 years, and never in the history of the snb has there been such a sustained period of low and stable inflation. prescriptions on the share of gold in the balance sheet, coupled with a sales ban, would make it considerably more difficult for the snb to fulfil its mandate in future. for this reason, the gold initiative is harmful. in order to pursue a stability - oriented monetary policy, the snb needs to be able to supply the swiss economy with swiss franc liquidity quickly in periods of crisis. the snb ’ s balance sheet expands when liquidity is increased. in the aftermath of a crisis, it

year since 2005 ; this is substantially higher than the yield available on other major government bond markets ( right - hand side of slide 5 ). in addition to these financial market advantages, china has strong economic fundamentals. at 40 %, china ’ s government debt ratio is much lower than that of many advanced economies. 6 furthermore, the credit quality of chinese central government bonds is high compared to that of other emerging economies, as is reflected in the ratings. foreign investors still enjoy only very limited access to the onshore chinese bond market, however, as the renminbi is not freely convertible and capital flows are still subject to controls. notwithstanding this, the chinese government has been working towards a gradual opening - up of its domestic capital market for several years now. as part of this, china ’ s central bank, the people ’ s bank of china ( pbc ), launched a so - called interbank market programme in 2010, enabling central banks, sovereign wealth funds and insurance companies to request an investment quota for the onshore chinese interbank bond market from the pbc. provided they do not exceed this quota, these entities may invest freely in the ( onshore ) chinese government bond market. more than 20 central banks – including those of france, austria, japan, australia and singapore – have now received a renminbi investment quota. in july this year, the snb signed a renminbi investment quota agreement with the pbc. the snb ’ s investment quota amounts to cny 15 billion ( in excess of chf 2 billion ). while this quota represents a very swiss national bank. 2013. 106th annual report. measured against a standard market index. imf. 2014. fiscal monitor october 2014. includes central and local government debt as well as governmentbacked debt. bis central bankers ’ speeches small proportion of our foreign exchange reserves, it allows the snb to gather some experience of this market. we intend to make use of this quota in the foreseeable future. according to the agreement, the snb is authorised to exchange currency at the pbc for renminbi up to a maximum amount defined in the quota ( slide 6 ). as in all global capital markets, bonds are traded overthe - counter ( otc ), in other words they are traded off - market via local investment banks or the pcb ’ s bureau in shanghai. approximately 90 % of all bonds are traded on the interbank bond market, and the remaining 10 % are