. in addition to this, many central banks have themselves bought exceptionally high amounts of their country ’ s own sovereign debt. in a crisis, that may be the right thing to do in terms of monetary policy, but it must not be done for reasons of money supply and monetary aggregates can be represented as the product of the money multiplier and the monetary base. for more information on the sovereign wealth fund issue, cf. inter alia jordan, thomas j. ( 2016 ), comments on swiss monetary policy, speech at the snb agm, berne, 29 april. for more information on how the snb contributes to a healthy pension system, cf. jordan, thomas j. ( 2019 ), challenges confronting the pension system – options and limitations of monetary policy, speech at the pk - netz conference, berne, 31 october. page 7 / 8 state financing. the challenge lies in safeguarding the clear separation of responsibility for monetary policy and fiscal policy even in this crisis situation, and thus ensuring that central banks remain independent in practice and not just on paper. it is particularly important to avoid scenarios where excessive government debt means that a central bank is de facto forced into making its decisions dependent on their impact on public finances. this would result in monetary policy no longer being centred on price stability and thus on sound money. 11 switzerland has been able to manage the additional debt well thus far thanks to the fact that its public finances were in good order when the crisis hit. that said, the coronavirus crisis has fuelled aspirations here, too. there have been mounting calls for the snb to make massive additional profit distributions. however, there are two things to bear in mind here. on the one hand, the size of any distribution depends on the earnings potential of our investments. and on the other hand, a central bank ’ s equity must be sufficiently high to cover the risks in its balance sheet. 12 ladies and gentlemen, a monetary system has to take account of the changing needs of the economy and society over time, and the evolving environment in which it exists. however, it is also important to note that it is an order that has developed over the course of history and any ill - considered interventions could entail serious consequences for our country and the population as a whole. swiss monetary history has been characterised by a wide range of changes, but the desire for sound money has been a constant throughout. today ’ s paper money system with central bank money and banks ’

now like to outline the outlook for the global economy and switzerland in more detail. i will then look at monetary and financial conditions and the snb ’ s monetary policy. in the first quarter, the growth of the global economy was weaker than expected, across the board. in many emerging markets, particularly china, economic activity lost strength. in the euro area, the recession continued, and in the us, the recovery remained hesitant. the only advanced economy to gain significant momentum was japan. however, in the quarters ahead, global growth is likely to firm up gradually. in the us, the recovery will be supported by the labour market and rising asset prices. in japan, the very expansionary economic policy is having an invigorating effect. due to the upturn in world trade and the improvement in financing conditions, the euro area is also likely to emerge gradually from recession. in addition, the burden imposed by budget consolidation will be lower next year. overall, however, the outlook remains uncertain. the risk of a deterioration in the global economy continues to be high. as before, the biggest risk remains a renewed deterioration in the euro area financial and sovereign debt crisis. even though our baseline scenario bis central bankers ’ speeches assumes a gradual solution of the crisis, it is possible that tensions could re - emerge on financial markets at any time. swiss economic outlook in switzerland, the economy experienced a temporary revival in the first quarter, as expected, and real gdp rose by 2. 3 %, in annualised terms. thus, we experienced more favourable growth than our neighbouring countries. the difference is primarily attributable to domestic demand. once again, growth was mainly driven by private consumption and investment in residential construction. these demand components benefited from the relatively robust labour market, a continued strong inflow of immigrants and the favourable financing conditions. in particular, the supply of credit in switzerland is currently having a much stronger effect on the real economy than in most european countries. in the case of exports, however, there are no indications of a lasting revival. since the beginning of 2011, real exports have been moving sideways. they are being held back not only by the high value of the swiss franc, but also by the subdued momentum in world trade. moreover, investment by swiss companies is hesitant. one reason for this is uncertainty about further developments in the global economy. however, further factors dampening investment activity are pressure on profit margins and the continued overcapacity in parts of the manufacturing industry.