from the euro area, upward pressure on the swiss franc remained high and became more intense still at the beginning of september 2011. the snb therefore decided to provide the foreign exchange market with clear guidance in the form of a minimum exchange rate for the franc against the euro. on 6 september 2011, it announced that it would no longer tolerate a eur / chf exchange rate below chf 1. 20. this exceptional measure enabled the snb to take a stand against an acute threat to the swiss economy and to counter the risk of a deflationary trend emanating from the massive overvaluation of the swiss franc. the minimum exchange rate was introduced as a temporary, emergency measure in a time of extreme turbulence. the franc remained high in the period that followed, yet deflation risk was held in check. moreover, the minimum exchange rate bought swiss companies – especially exporters and industries facing competition from imports – some time in which to plan their next steps in a very difficult operating environment. discontinuation of the minimum exchange rate the minimum exchange rate has undoubtedly served switzerland well during an exceptional period. however, the old adage popular among economists – “ there ’ s no such thing as a free lunch ” – holds true for monetary policy as well. the snb governing board was well aware that the introduction of a minimum exchange rate would entail certain risks – and we consistently alluded to these. that the snb would have to make large foreign currency purchases and expand its currency reserves in order to enforce the minimum exchange rate was thus to be expected. the snb must be willing to bear these risks if doing so is necessary for the fulfilment of its legal mandate, and if these risks are justified given the chances of success. we enforced the minimum exchange rate consistently for more than three years ( 6 september 2011 to 15 january 2015 ). at the peak of the euro crisis in 2012, the snb had to purchase chf 188 billion of foreign currency. adding this to purchases from prior years reveals that the snb ’ s currency reserves rose from chf 50. 5 billion in 2007 to in august 2011, the snb announced that it would very significantly increase the supply of liquidity to the swiss franc money market by expanding banks ’ sight deposits at the snb from chf 30 billion to chf 80 billion within a few days. shortly afterwards, the snb decided once again to increase banks ’ sight deposits substantially, to ch

this is the core business of the swiss financial industry. further progress will depend in large measure on what the outlined background conditions will look like in future. in this context, it is the overall situation that counts rather than conditions in a certain area. outlook at the turn of the century, switzerland is economically and socially in good condition. following years of frequently painful adjustments to a changing environment, preconditions for a balanced development are favourable. the quality and scope of these adjustments bear witness to the flexibility of our economy and society. the years ahead will continue to be characterised by constant change. it is therefore important to remain vigilant. on the basis of overall economic as well as social stability, innovative power and flexibility must be preserved. in a mature society, this represents a particular challenge. by keeping our own house in order, we also make the best possible contribution to international solidarity. in the narrower european context, our bilateral agreements with the european union will form a good basis for cooperation in the coming years. in europe and beyond, switzerland traditionally has an extensive network of international relations which we shall continue to cultivate in the future. as far as these relations are of a political nature, an appropriate social consensus is necessary for doing so. the further development of our financial centre will depend on whether we succeed in continuing to guarantee the attributes mentioned earlier on : integrity, stability and quality. this requires efforts both on an individual and on an overall economic level. a sustained commitment in both spheres will permit existing opportunities to be used.