they define the principles of investment policy and the investment categories underlying the strategy, and describe the areas of responsibility. the quantitative information already published in the annual report will also be published on a quarterly basis in the future, thus providing the public with even more comprehensive information on our investment activities. 5. conclusion the management of the monetary reserves has gained in importance. the national bank act requires the national bank to manage its monetary reserves professionally, subject to the primacy of monetary policy. after the new act entered into force, we began to further optimise the investment structure. the increased leeway for investment is used for greater diversification. the structure of the national bank ’ s investments is thus becoming more efficient overall, yet without compromising monetary policy requirements in terms of the liquidity and security of these investments. we will also take advantage of the extended legal scope with regard to the free assets, i. e. the proceeds from the sale of gold reserves no longer required. investment policy guidelines of the swiss national bank ( 235 kb )

. given the bank ’ s large portfolio holdings in us dollar and euro government bonds, the liquidity requirements are currently more than met. this creates a certain amount of leeway for investing in instruments that are less liquid but generate a higher return. the investment criterion “ security ” must be seen in the context of the monetary reserves as a whole. the national bank incurs risks on its investments that cannot be hedged based on monetary policy concerns. losses from gold and foreign currencies in particular can be significant. an adequate volume of reserves allows the national bank to bear these risks, especially since such fluctuating values tend to correct themselves over the long term. greater diversification of both the currencies and the investment instruments can bring about the necessary growth of monetary reserves. diversification effects permit investments in higher - yielding and - from an individual perspective - riskier investments such as equities and corporate bonds without substantially increasing the overall risk. the return potential of monetary reserves depends on the liquidity and security requirements of the investments in terms of monetary policy considerations. pursuing an efficient investment policy for the national bank means achieving a return potential that is as high as possible within the existing restrictions. under the new act, the national bank will pursue a broader diversification of its investments and, in particular, also invest in equities and corporate bonds. because of the national bank ’ s special position as a central bank, the exposure to equities and corporate bonds is subject to some specific considerations : first, a conflict of interest may arise between monetary policy and investment policy. for instance, interest rate hikes by the national bank can have a negative impact on a company ’ s profits. second, owing to its responsibilities in the area of system stability, the national bank has insider information in the financial sector. and third, the national bank ’ s investments in equities and corporate bonds can have a noticeable impact on risk premiums on the capital markets, especially in illiquid markets. these considerations primarily concern equities and bonds issued by swiss firms. they are therefore excluded from the national bank ’ s investment universe. holdings of foreign equities and corporate bonds do not present a problem in this regard. a passive management strategy based on indices with liquid, listed securities is followed for equities portfolios. consequently, we do not engage in stock picking or sector picking. as a rule, we do not exercise our voting right at annual general meetings. in the case of corporate