%. it also stated its intention to expand sight deposits at the snb. these were subsequently increased from around chf 30 billion at the beginning of august to over chf 250 billion by the first week of september. the snb used a range of well - established instruments to effect this extraordinary increase in the supply of liquidity to the swiss franc money market, as chart 3 shows. firstly, reverse repo operations were discontinued. as a result, outstanding reverse repos fell from chf 26 billion on 3 august to zero a week later. secondly, the snb stopped renewing snb bills that fell due, and later started to repurchase those that remained outstanding. while these amounted to some chf 110 billion at the end of july, this figure gradually decreased to below chf 45 billion by the end of august, reaching some chf 20 billion by the end of november. thirdly, to further boost liquidity, on 10 august the snb also started to employ foreign exchange swaps. these amounted to approximately chf 80 billion by the end of the third quarter. fourthly, the snb again resorted to conducting repo operations, which provided the swiss franc money market with approximately chf 18 billion of liquidity in august and up to around chf 33 billion in november. these exceptional liquidity measures exerted downward pressure on interest rates. in line with the goals stated in the snb ’ s announcement of 3 august, the three - month libor fell from 17. 5 bp on 2 august to a low of 0. 3 bp on 5 september, as chart 4 shows. it is now hovering around 5 bp, though it is worth noting that limited volumes of unsecured trades are being conducted in the present environment. the significance of the three - month libor remains unchanged, however, as reflected by the fact that all money market interest rates are currently close to zero, as is the swiss franc libor itself. since early august, the libor futures yield curve has also decreased sharply, with its march 2012 maturity reaching – 0. 5 % on 18 august. that day, the entire curve for the period up to september 2013 also lay below zero. the three - month rate implied in the price of eur / chf swaps reached a low of – 1. 5 % 4. from a foreign investor ’ s standpoint, such interest rate conditions make the swiss franc and its money market less attractive, as

almost three years, such as ireland and portugal, the completion of the financing plans of the italian and spanish treasuries, the fact that the share of italian public debt held by non - residents has increased, and lastly a stabilisation of target2 balances, which are the true measure of the economic and financial imbalances in the euro area. finally, it is yesterday ’ s news that recourse to the ecb by banks in some large countries that were in difficult funding conditions has declined for the second consecutive month. it is important to understand that financial stability in the euro area is in everyone ’ s interest, but primarily in the interest of creditor nations which have greater exposures. there is no doubt that these improvements would not have been sustainable, nor would they be so in the future without an extraordinary, persistent and, above all, structural consolidation of public budgets and structural reforms in all euro area countries. bis central bankers ’ speeches completing economic and monetary union it is worth looking back to remind ourselves of the difficulties that the process of european integration has encountered in the past, and overcome. tommaso padoa - schioppa ’ s tenure at the banca d ’ italia and at the european commission was punctuated by realignments in the exchange rate mechanism of the european monetary system. he famously pointed out the key problem of the “ inconsistent quartet ” – fixed exchange rates, free trade, capital mobility and national monetary policies. the single currency was identified as the solution. today, we see that this solution was incomplete. the crisis has exposed the need to complete economic and monetary union. in my joint work with the presidents of the european council, the european commission and the eurogroup, we have identified four pillars on which to build a stable and prosperous europe : a banking union with a single supervisor ; a fiscal union that can effectively prevent and correct unsustainable budgets ; an economic union that can guarantee sufficient competitiveness to sustain high employment ; and a political union that can deeply engage euro area citizens. progress is under way in all these directions. of course, it is not straightforward to implement such an ambitious vision. but i am confident that europe will once again emerge stronger from its present difficulties. tommaso was convinced that “ a strong currency requires a strong economy and a strong policy, not only a central bank that is strong and authoritative ”. i share his conviction. the ecb ’ s response to the crisis has a clearly defined relationship