news conference berne, 15 june 2017 fritz zurbrugg introductory remarks by fritz zurbrugg in my remarks today, i will present the key findings from this year ’ s financial stability report, published by the swiss national bank this morning. in the first part of my speech, i will look at the situation of the big banks, focusing on the progress made in implementing the revised ‘ too big to fail ’ regulations ( tbtf2 ) that came into effect almost a year ago. in the second part of my remarks, i will outline our current assessment of the situation at domestically focused banks. big banks let me start then with the big banks and the tbtf2 regulations. the revised regulations are designed to resolve the ‘ too big to fail ’ issue in switzerland, so that systemically important banks no longer have to be bailed out with taxpayers ’ money in the event of a crisis. the tbtf2 regulations rest on two complementary pillars. first, they are aimed at strengthening the resilience of systemically important banks in a going - concern perspective. they therefore specify higher requirements for going - concern capital in particular, thereby reducing the likelihood of a systemically important bank getting into financial distress. second, if a systemically important bank nevertheless gets into financial distress – this is called the gone - concern perspective – the regulations provide a framework for orderly resolution, ensuring the continuation of systemically important functions without the use of public funds. to this end, the regulations stipulate requirements both for loss - absorbing capacity in a gone - concern perspective and for resolution planning. what progress have the two big banks made in implementing the tbtf2 regulations? regarding the first pillar, resilience, both big banks have improved their loss - absorbing capacity in a going - concern perspective since the last financial stability report. with this further improvement, credit suisse and ubs are on track to meet the final capital page 1 / 3 berne, 15 june 2017 fritz zurbrugg news conference requirements. 1 in a going - concern risk - weighted perspective, both banks are already fully compliant. however, a further improvement is necessary with respect to the leverage ratio. the snb acknowledges the progress made in improving the capital situation. achieving full compliance with the tbtf2 regulations will further strengthen loss - absorbing capacity. this is necessary as the big banks ’ loss potential relative to their capitalisation continues to be substantial, when measured on the basis of the stress tests carried out by the snb

. the title of my speech is “ monetary independence and monetary stability : two sides of the same coin ”. i will start by looking at some of the features which have given switzerland the reputation of a financially strong country. among other elements, i will show that price stability has played a central role in this respect. but there can be no monetary stability without an independent central bank and an independent monetary policy course. drawing on my experience at the swiss national bank, i will spend some time discussing what, in my view, are the most crucial characteristics of a successful monetary policy. i will conclude my speech by addressing the thorny question of the choice of a monetary policy regime. after all, is it worthwhile for a country in the vicinity of a large monetary zone the euro zone or the dollar zone - to try to conduct an autonomous monetary policy? switzerland ’ s tradition of financial stability many people outside switzerland think that financial stability should be added to the list of swiss specialties like chocolate, watches and banks. indeed, the fact that switzerland is the only country that has been able to keep unchanged its set of coins in circulation since the franc was created in 1850 speaks for itself. even more spectacular is the position of the swiss franc, which has retained its international purchasing power over time. the swiss franc has been devalued only once, in 1936, during the great depression, following the devaluation of all major currencies. financial stability has contributed to shape switzerland ’ s business environment and, to a certain extent, explains some of the typical features of the swiss economy. for example, with about 32 % of gdp, the swiss saving rate is among the highest in the world. some of these savings are channelled abroad via our banking system, and their proceeds guarantee us a very strong balance of payments position. as a matter of fact, switzerland ’ s current account is almost endemically positive. as the counterparties to large positive current accounts are, by definition, large negative positions in the capital account, switzerland has become a net creditor to the rest of the world. contrary to the popular belief that my country is the ultimate recipient of other countries ’ savings, switzerland is in fact a traditional net exporter of capital. by and large, our current account surplus amounts to 13 % of gdp. although portfolio investments remain the preferred channel for investing abroad, foreign direct investments have, in line with the process of globalization, increased steeply in the last ten to fifteen