jean - pierre danthine : situation at swiss banks from a financial stability perspective introductory remarks by mr jean - pierre danthine, vice chairman of the governing board of the swiss national bank, at the media news conference of the swiss national bank, berne, 19 june 2014. * * * as my colleague thomas jordan has explained, economic and financial conditions continue to be challenging. against this background, i would like to examine the situation at swiss banks from a financial stability perspective, looking first at the big banks and then moving on to a discussion of domestically focused banks. big banks : strengthening resilience over the past year, the swiss big banks have further improved their capital situation. in terms of loss - absorbing capital – defined as common equity tier 1 capital plus high - trigger contingent capital instruments – their risk - weighted capital ratio either already exceeds or is close to the 13 % requirement that will apply from 2019. they also meet or are very close to meeting the corresponding leverage ratio requirement of 3. 1 %. in terms of total capital, both big banks have also substantially improved their ratios. however, they have yet to meet the corresponding requirements applicable from 2019. 1 the snb welcomes the significant progress made by the big banks in improving their capital situation and their compliance with some of the requirements applicable from 2019. the snb recommends that they continue to improve their resilience and, in particular, their leverage ratios. this is important for two reasons. first, the loss potential for the swiss big banks – estimated under the different adverse scenarios considered – continues to be substantial relative to their capitalisation. these adverse scenarios are not forecasts. they represent unlikely, highly unfavourable but coherent developments in economic and financial conditions. for financial stability in switzerland, it is important that the big banks remain adequately capitalised in the event of such scenarios occurring. in addition, irrespective of the scenario considered, substantial losses can also result from operational and legal risks, as recent experience has shown. second, an international comparison reveals an uneven picture of the swiss big banks ’ capitalisation, depending on which capital measure one examines. although their riskweighted ratios are above average for large globally active banks, the same cannot be said for their leverage ratios, as calculated according to various common definitions. leverage ratios are gaining in importance as a measure of banks ’ resilience. experience shows that these ratios quickly become the focus of market attention during a crisis. moreover, the international requirement,

jean - pierre roth : economic prospects for 2005 in a subdued european environment summary of a speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the “ les rencontres au chateau ” meeting, sierre, 22 february 2005. the complete speech can be found in french on the swiss national bank ’ s website ( www. snb. ch ). * * * although the swiss economy expanded by almost 2 % in 2004, this was not sufficient to reduce unemployment significantly. hopes for an improvement in this respect are thus focused on this year. however, they might unfortunately remain unfulfilled once again. at the end of 2004, there were already signs of a slowdown in growth caused by the weak dollar and persistently high oil prices. these factors also played a key role in the national bank's decision to leave interest rates unchanged. overall, the international economy developed in line with expectations during the first two months of 2005 : the us and asia saw further growth, while europe was confronted with increased difficulties. the us economy is burdened with high budget deficits and the current account deficit. in asia, the chinese economy is booming, whereas japan is still struggling to find its way back to the growth path. the monetary situation in asia, too, appears less than stable. in europe, the economic environment presents a rather dim picture. germany, italy and the netherlands are expected to see rather modest growth, while the outlook for france is more upbeat. the uk is the exception : since the mid - 1990s, the country has emerged as the growth model for europe. for switzerland, the sluggish development in europe is especially regrettable, as the swiss export sector usually serves as the engine for economic recovery. all in all, switzerland's export industry is well positioned to benefit from higher demand from abroad. switzerland has been able to reduce its production costs per unit in the past few years, and the swiss franc even depreciated slightly versus the euro since the launch of the single currency. as regards domestic demand, consumer sentiment remains satisfactory overall, but this should not be expected to stimulate growth decisively. while construction activity is robust, it has lost some of its momentum. investment in equipment is still brisk, and the recent modest slowdown should not last too long. on the whole, the swiss economy is still on its growth trajectory, but it lacks stimuli from abroad. this situation is the same as the one underlying the