heritage. due to the courage and sacrifices of those who preceded us, we now reap the benefits of a prosperous economy and a healthy currency. our gratitude also extends to the authorities and to the swiss people. we are appreciative of the confidence placed in us by the federal council and by parliament. in guaranteeing our independence, the federal constitution gives us the means to act entirely in the interests of monetary stability. the political authorities can count on us using our freedom of action solely in the interests of fulfilling the mandates with which we are entrusted by the legislator. we are also aware that, despite our efforts to communicate our decisions, the general public often finds them difficult to understand. that is why we truly value the confidence that the public places in us. it helps to sustain us when carrying out the mandate with which we are entrusted under art. 99 of the federal constitution, that of conducting a monetary policy that serves the interests of the country as a whole. finally, i would also like to thank you, the shareholders of the swiss national bank. as representatives of cantons, cantonal banks, collective bodies or swiss public law institutions, or as individual shareholders, you have faithfully supported the swiss national bank since its foundation in 1907. you have remained at its side throughout all the ups and downs of its history and we are grateful for your support. your presence is the guarantee of our independence, an essential factor in the success of our efforts to preserve the monetary stability of our country.

via the socalled'zweiter bildungsweg'and began studying economics at the university of regensburg. after only two years there, markus moved to the us, where he earned a master's degree in economics from vanderbilt university. a few years later, he completed his phd at the london school of economics. markus was then appointed assistant professor at princeton university. in 2006, he was promoted to full professor. 1 / 3 bis - central bankers'speeches much like a carpenter spotting a leak in the roof, markus has a keen sense of where additional research is most needed. whenever economists lack good models for analysing current developments, markus tries to close these gaps. a defining event early in his career was the dot - com bubble. in the years before the bubble burst in 2001, the stock prices of many technology companies reached levels that were no longer connected to fundamentals. even more puzzling was the fact that many investors who bought these stocks probably knew they were overpriced. markus showed in a paper co - authored with stefan nagel that us hedge funds – which are generally considered to be well - informed – invested heavily in technology stocks. at the time, economists struggled to explain how such price bubbles could form and why even sophisticated investors participate. together with dilip abreu, markus developed a model to explain this phenomenon. the key insight is that even if many investors individually know there is a bubble, no one knows for sure how many others know about this bubble and when they will sell the stock. it can therefore be perfectly rational for informed investors to ride the bubble while it lasts, and then try to sell their stock before others do. the macroeconomic effects of the dot - com bubble were limited compared with those of the global financial crisis of 2007 / 08. economists were faced with a difficult question : how could losses in a particular segment of the us mortgage market trigger the largest global economic crisis since the great depression? the standard macroeconomic models of the time were not suitable for answering this question, since they largely abstracted from the role of the financial sector. here too, markus took on the challenge of bridging the gap between theory and reality. together with yuliy sannikov, he developed a macroeconomic model with a financial sector that has since become standard in the literature. in their model, the resilience of the financial system is severely impaired when it operates with little equity. in such cases, even modest losses