without having to resort to central bank liquidity. cn : well, the fact that it went well doesn ’ t mean that it will always go well. it may depend also on the type of instruments that you are clearing. we have the feeling that it may be different for, on the one hand, fixed - income instruments and, on the other hand, derivative instruments. but this is a long - standing position, it is not taken especially vis - a - vis london. ft : what sort of model of european capitalism will emerge after this economic crisis? cn : we will probably return to a more organised, ruled, economic system. we are discussing regulation of the financial system but it doesn ’ t mean that we need an over regulated system – certainly not. we have to strike a balance, but it is clear in europe, that we hope we will have a system that will be more regulated, or at least better regulated, without holes in the system. but we are living in a global world and we need to have consistent rules around the world. ft : but europe also needs to have its own internal dynamism, to encourage innovation. that was part of the problem of the economic model before the crisis. if you create more regulation, doesn ’ t that make the problem worse? cn : i think it does not prevent innovation if the rules are well designed. the lesson that we should take from the crisis is that if we let something an innovation – like hedge funds, or securitisation – develop freely and continue not to regulate it or exert any surveillance even if it grows to such an important level that it is systemic, then the risk is enormous. we should be able to detect when a systemic risk is becoming too big in the system and then act.

of the option programs, the spot sales and the sales through the bis. snb spot sales were realized at a price corresponding to the fixing plus 22 cents, whereas the average premium over the fixing for the cap sales was usd 1. 9. iv. lessons and conclusions last week, the snb ’ s general assembly approved the 2004 accounts of the snb, thereby formalizing the disbursement of the chf 21. 1bn proceeds of the 1300 tonnes of gold. one third of that amount will go to the federal government and two thirds to the 26 cantons. beginning on may 12, the snb will disburse the money in ten weekly tranches. the disbursements will have no impact on the swiss yield curve or the exchange rate as the necessary portfolio adjustments were made in the run up to the pay out. with the final tranche on july 14, the disbursement of the proceeds from the gold sales will have been completed, representing the largest financial transaction in the history of the swiss national bank. in my view, the most important lesson to be drawn from the snb ’ s gold sales is that the decision to sell official gold holdings should be made separately from any consideration on how to use the proceeds. the history of the snb sales shows that notwithstanding the constitutional and legal complexities i referred to earlier, the time between the expert opinion about the snb ’ s excess reserve capital and the first sales was two and a half years. switzerland ’ s politicians, on the other hand, failed to reach a consensus on what to do with the proceeds. after eight years of relentless debates and a squarely rejected referendum on the swiss foundation for solidarity in 2002, the funds will be disbursed according to the constitutional distribution key for the snb ’ s regular profits. i don ’ t want to burden you with the intricacies of the swiss political debate around the gold proceeds. let me simply say that it was not for lack of creative ideas that a consensus failed to emerge. this lesson strikes me as relevant with regard to potential renewed discussions about imf gold sales. such discussions should exclusively be conducted on the basis of a thorough examination of the solidity of the imf ’ s financial position and not become entangled with proposals on how to allocate any expected proceeds. finally, let me offer a couple of specific lessons from the snb ’ s gold sales that underline the benefits of transparency. total official gold holdings