encompassing special requirements for systemically important banks in the areas of capital, liquidity and organisational structure. these key measures are compatible with the approach discussed by the financial stability board. besides those proposed by the commission of experts, other measures being considered at the international level include the breaking - up of big banks, the prohibition of certain activities such as proprietary trading, and the taxation of balance sheets and transactions. the snb fully supports the proposals put forward by the commission of experts to date. the overall direction is correct. what is important now are the details of the measures. our position is clear. it is essential that capital requirements be significantly increased and that they rise in line with the degree of systemic importance of a bank. this is the only way to ensure that the banks internalise the risks which, until now, they have been able to pass on to the general public, to some extent. moreover, progressive capital requirements should create an incentive for banks to reduce their systemic importance, with its associated risk potential. allow me to point out that the tightening of capital regulations and the introduction of a leverage ratio that occurred at the end of 2008 were not aimed at reducing the systemic importance of the big banks to an acceptable level. these measures were much more a response to regulatory shortcomings revealed by the recent crisis, which were insufficiently conservative backing of risk with capital ( particularly in the trading book ) and the lack of a countercyclical component in capital requirements. as regards more stringent liquidity requirements for systemically important banks, specific measures have already been implemented. the liquidity requirements have been thoroughly revised by finma and the snb in collaboration with the big banks, and will come into effect at the end of this month. the final key measure, which is aimed at organisational structure, is also important. the organisation and legal structure of systemically important banks must be adapted to ensure that an orderly liquidation is possible should it become necessary. in particular, it must be possible for systemically important functions to be maintained without the bank as a whole having to be rescued. clearly, this is not easy to achieve. the implementation of this measure must take into account the challenges posed by the considerable complexity and cross - border activities of the big banks. it must be credible and robust – both operationally and legally. an unworkable approach in this area could have fatal consequences in the next crisis. the snb will continue pushing hard for a genuine alleviation of the “ too

jean - pierre roth : recent economic and financial developments in switzerland introductory remarks by mr jean - pierre roth, chairman of the governing board of the swiss national bank and chairman of the board of directors of the bank for international settlements, at the end - of - year media news conference, zurich, 14 december 2006. * * * as stated in our press release, the swiss national bank is raising its target range for the three - month libor with immediate effect by 0. 25 percentage points to 1. 50 – 2. 50 %. the snb intends to hold the rate in the middle of the target range for the time being. economic activity in switzerland is very robust. next year, the economic trend is likely to continue favourable, albeit somewhat less pronounced. this will have a positive effect on the labour market. the national bank is expecting real gdp to grow by just under 3 % in 2006 and by around 2 % in 2007. declining oil prices have pushed back inflation. average inflation for 2006 is likely to stand at 1. 1 %. by lifting the target range, the national bank ensures that the inflation outlook will remain favourable, even in view of the high level of utilisation of economic resources. on the assumption of an unchanged three - month libor of 2. 00 %, it expects annual inflation to reach 0. 4 % in 2007 and 0. 9 % in 2008. if the economy performs as expected, the snb will further pursue its strategy of gradual normalisation of its interest rates. the economy is currently in excellent shape and has clearly strengthened during the past two years. at the monetary policy assessment at the end of 2004, we had suspended a normalisation of the interest rates after previously having lifted the three - month libor from a low point of 0. 25 % to 0. 75 % in june and september. the three - month libor remained at that level up to december 2005 when we made the decision to resume the normalisation process, given the improved economic outlook. today's decision – an interest rate hike for the fifth time in succession – confirms the stance we have taken. international environment the change in the international environment with the most tangible impact since the monetary policy assessment in september concerns the price of oil. the current oil prices are clearly below the highest level of 78 dollars per barrel of brent crude which was reached in august. will we see higher oil prices again? there is no real conclusive answer to this question. what we have witnessed is nonetheless