jean - pierre roth : review of the swiss economy speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the bank ’ s annual general meeting, berne, 29 april 2005. * * * dear shareholders dear guests 2004 : the economic upswing continues the economic upswing that began in summer 2003 continued last year. economic growth moved into the positive zone and came close to its potential level once again. while growth was slightly negative in 2003, it reached 1. 7 % for 2004 as a whole. the recovery in switzerland is due in large part to the rebound in global economic growth, which reached its highest level since 1976. swiss companies have benefited from this situation : last year, exports rose by 6. 7 % – a significant increase compared with the 2003 figure. this figure reflects our exporters'continuing wish to adapt to changes in demand, as well as the untiring efforts to streamline swiss industry and maintain switzerland's appeal as a location for business. the swiss economy's strong presence on the international markets has been a reality for a long time. as our direct investments abroad have grown, however, it has taken on a new dimension in recent years. not everyone is aware that while switzerland is a champion in savings, it also boasts a performance in the area of foreign investments that is unrivalled. in 2003, we invested some chf 20 billion abroad – a sum equivalent to almost 20 % of national savings. roughly half of these investments were concentrated in the european continent. over the years, and given switzerland's trade surplus, our companies have thus developed an extremely dense international network of production facilities. in addition to the 4 million jobs within the domestic economy, swiss companies employ a further 1. 8 or so million people abroad. of these, 1 million work in european countries. these figures show that switzerland has by no means resigned itself to low growth, but has seized the opportunities created by the opening - up of borders and markets. these days, a lot of people worry about competition from low - wage countries and the resulting relocations. however, they overlook the fact that our country is a major beneficiary from the more pronounced international division of labour brought about by globalisation. the relocation of certain production stages is inevitable. it allows our companies to stay competitive in the face of high swiss labour costs. in some respects, the jobs created abroad secure those at home with more added value. " one out of

##udential regulator unclassified ref # x798971 v1. 2 unclassified expectations to be responsible for the prudential regulation of more than just banks. for us, this means we are also responsible for the prudential regulation of non - bank deposit takers, financial market infrastructures, and insurance companies in new zealand. these types of financial institutions serve important roles in new zealanders ’ lives, and also present different risks to the financial system. expectations to use more than market discipline. while market discipline still plays an important role, there are expectations on us to also apply greater regulatory discipline to have a more intensive approach to supervision. this was highlighted in the international monetary fund ’ s 2017 financial sector assessment program report of new zealand, and through lessons learned from the failure of cbl insurance. 8, 9 expectations on us to be fully prepared for crisis management. during the global financial crisis, the government established a temporary deposit compensation scheme, which highlighted that our strict approach of disclosure, market discipline, and buyer beware was not enough. the government has announced that it intends to introduce a permanent deposit compensation scheme, to bring us in line with our international peers. 10 expectations on us to recognise the role financial stability plays in enabling financial inclusion and financial innovation. financial stability is the foundation needed to enable financial inclusion and innovation, to help create a diverse and vibrant financial system that serves all new zealanders. expectations on us to take a long - term perspective on issues like climate change. we are recognising the impacts that climate change can have on the financial system. we released our climate change strategy in 2018, which focuses on ways in which we can contribute to efforts to identify, understand and manage the risks of climate change for new zealand's financial system. we are also part of the network for greening the financial system ( ngfs ), a global network of 114 central banks and financial supervisors. 11 expectations on us to work collaboratively with other regulators, both domestically and internationally. we are part of the council of financial regulators ( cofr ), along with the other financial system regulators in new zealand : the financial markets authority ; the commerce commission ; the ministry of business, innovation and employment ; and the treasury. 12 we also maintain relationships with central banks and prudential regulators around the world, including as part of the trans - tasman council on banking supervision. _ _ _ _ _ _ _ _ _ _ _ _ 8 the