real estate investments. while us property prices dropped by 2 % in 1929 and 4 % in 1930, they are currently falling at a rate of 17 %. 3 never before have so many assets been wiped out worldwide in the space of a few months as they were this year. chart 1 shows the “ fever curve ” of the money market, i. e. the difference between the three - month libor and the three - month ( t ) ois rate ( tom - next / overnight indexed swap ). this difference reflects the credit and liquidity risk premium on unsecured money market trades. it is a barometer of the health of the money market and, in the broader sense, also for that of the financial markets in general. the five crises in the comparison are the stock market crash of 1929, the oil crisis of 1973, black monday in 1987, the bursting of the it bubble in 2000, and the current crisis. in each case, we look at price performance in and around the index ’ s highest recorded level prior to the crisis, which does not necessarily coincide with the onset of the turmoil. the highest levels were reached on 3 september 1929 ( black tuesday was on 29 october 1929 ), on 11 january 1973 ( oil crisis ), on 25 august 1987 ( black monday was on 19 october 1987 ), on 14 january 2000 ( it bubble ), and on 9 october 2007. for annual data and the case - shiller composite 20 index, cf. robert j. shiller, irrational exuberance ( 2006, 2nd edition ). these financial losses alone will continue to have a major impact on the real economy for some time to come, owing to the fact that their full effect is not generally felt immediately. despite the historic disruptions in the financial markets, this is not the 1930s. the main differences to back then being the decisive way in which monetary and fiscal policy reacted and the far - reaching government intervention aimed at bolstering the financial system. as a result, the financial markets have been able to continue functioning, albeit to a much lesser extent. yet the extraordinary circumstances pose a huge challenge to all market participants, not least to central banks. both the swiss national bank ’ s ( snb ) monetary policy strategy and its instruments have been thoroughly put to the test. over the past few months, several observers have remarked that the snb ’ s monetary policy had occasionally slipped from its control. we do not share this view. while it cannot be ruled out

overall strategy for structural reforms in the labour market, the social security systems and fiscal policy. despite some shortcomings, a major portion of the reforms now being implemented are in line with our proposals. i would like to stress the enhanced flexibility of the labour market that has now been accomplished. fixed - term contracts can be used more extensively when setting up a new business. dismissal - protection rules have been eased for small businesses, thus lowering a major hurdle to new recruitment. incentives to work in the low - wage sector have been increased by reducing the period of entitlement to transfer payments from 18 to 12 months in most cases. furthermore, the crafts code has been deregulated to enable more people to set up their own business. germany has begun to cut back subsidies such as tax breaks for commuters or new home - owners. in the statutory health insurance system, patients now share the costs of any treatment they seek. over - use of what, up to now, have been regarded as “ free ” health care services might thus be contained to a certain extent. 3. 2 unfinished reform business there is a lot of unfinished business on the german reform agenda. but, at least, germany has made a start. our partner states in europe and elsewhere are taking note of this. now is not the time to take a rest, as we still have a long way to go before the german economy has truly regained its former dynamism. we need to build on the newly acquired momentum for reform. there has to be a further improvement in the supply side conditions, red tape has to be cut back, and setting - up a business has to be made easier. the labour market would clearly benefit if employers and employees were allowed to depart from the terms of centralised wage agreements provided jobs can be secured in that way. a general broadening of the scope for non - centralised wage settlements at the individual company level might also help to improve labour market flexibility. non - wage labour costs have reached a level that acts as a major impediment to employment and economic growth. the rapid ageing of the population will put the systems under further pressure unless they are reformed speedily and thoroughly. in order to contain the cost dynamics in the health care system without compromising quality, higher levels of competition and transparency are needed on the supply side. insurance contributions have to be made separate from employment contracts. funding of the pension system must be broadened. as benefits paid out in the pay - as