. 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

- resource economy continues to grow at a moderate pace. and within that, non - resource exports are clearly gathering momentum. by the time we reached the new year, there was a clear sense of anxiety among many financial market participants. the outlook for global growth was being downgraded again, and commodity prices were plumbing new lows. at the bank, we had new intelligence that canadian energy companies would be cutting investment even more than previously thought. in this context, we said that we entered deliberations for our january interest rate decision with a bias to easing policy further, but decided to wait to see details of the government ’ s fiscal plan. since january, we ’ ve seen a number of negative developments. first, projected global economic growth has once again been taken down a notch for 2016 and 2017. this includes the us economy, where the new profiles for investment and housing mean a mix of demand that is less favourable for canadian exports. second, investment intentions in canada ’ s energy sector have been downgraded even further. true, oil prices have recovered significantly from their extreme lows. but canadian bis central bankers ’ speeches companies have told us that even if prices remain around current levels, there will be significant further cuts beyond what we foresaw in january. by convention, we incorporate the average oil price from the few weeks before we make our forecast, letting us look through variability in markets. because of this, our oil price assumptions are only $ 2 to $ 3 per barrel higher than they were in january. third, the canadian dollar has also increased from its lows. our assumption in our current projection is 76 cents us, four cents higher than in january. while there are many factors at play, including oil prices, most of the increase appears to be due to shifts in expectations about monetary policy in both the united states and canada. the higher assumed level of the dollar in our projection contributes to a lower profile for non - resource exports, as does lower demand from the united states and elsewhere. as the bank ’ s governing council began its deliberations for this month ’ s interest rate announcement, we saw that these three developments would have meant a lower projected growth profile for the canadian economy than we had in january. this may sound counterintuitive, given the range of monthly economic indicators that started the year strongly. however, some of this strength represents a catch - up after temporary weakness in some areas during the fourth quarter, and some of it reflects temporary factors that