system. a second fear that we had was that it would become very difficult in the future to conduct an independent monetary policy. switzerland, together with liechtenstein, would now be totally surrounded by a single monetary zone. as you know, switzerland is a small open economy, and i emphasize both the words small and open. indeed, we are widely open. nearly half of our national income is generated abroad, and the european union is by far our largest foreign partner. about two thirds of our exports head in that direction, and we are one of the best customers of the eu. we are also very small, meaning that although we have no significant impact on the rest of europe, we are very exposed to foreign shocks, whether they are real or monetary in nature. our activity is highly correlated with that of the eurozone. under these conditions, would the snb still be in a position to conduct an independent monetary policy? would it be realistic to expect the snb to follow a course that deviated from the one set by the european central bank, or would the snb be obliged to shadow the actions of the ecb? the question of an independent monetary policy is not just a matter of safeguarding the interest and the prestige of our job as swiss central bankers. the stakes are much higher. for one thing, even if swiss activity and economic conditions more generally are highly correlated with europe, the correlation is not perfect. our economy, although offering many similarities to the german and french economies, also has its specificities. thus, switzerland is very well supplied with physical and human capital. as a consequence, the return on capital is relatively low and wages are relatively high, particularly so for unskilled workers. we thus tend to specialize in capital - intensive and high - value - added activities. external shocks tend to impact on us in a way that is not exactly the same as for the rest of europe. moreover, we have to cope with home - brewed shocks as well. it is for these reasons that we are eager to keep an independent monetary policy. furthermore, if markets became convinced that in the future the snb ’ s actions would merely be a xerox copy of the ecb ’ s monetary policy, they would rapidly force a convergence of our nominal interest rates with those of the eurozone. our real interest rates might remain lower for a while, given our relatively large endowment of physical capital, but a tendency towards equalization would nonetheless set in. what this might

pakistan banking awards 2017 launching ceremony ladies and gentlemen a€ “ assalm o alaykum. after the tremendous success of the 1st banking awards in 2016, i am delighted to address this distinguished gathering of executives and academicians from the banking and finance sector at the launching ceremony of the 2nd pakistan banking awards 2017. as you are well aware, the financial sector plays a pivotal role in determining the overall economic growth and development of a country. the contribution and achievements of the institutions contributing to this sector should be recognized and acknowledged. the initiative of launching the first ever banking awards by the institute of bankers pakistan with dawn media group in collaboration with a. f. ferguson & co in 2016, is indeed a landmark in the history of banking in pakistan. i am delighted that these prestigious awards are now an annual affair and encourage new entrants to make their mark while motivating the established institutions to strive for excellence. these awards honor and promote the efforts of banks for developing new and innovative products and services, while giving them the incentive to enhance their performance for the coming year. they encourage the active participation of banks by setting the benchmark and allowing them to gauge their standing within the industry. most importantly, they inculcate a spirit of healthy competition as the awards are a great source of pride for the winning institutions. the distinguished members of the jury selected are indeed institutions in themselves and are worthy to do the needful. i am confident that like in the past, this year again complete transparency and secrecy will be maintained and all nominations would be made exclusively on merit. this is the essence of building credibility of these awards. it is a matter of satisfaction from the view point of regulator as well that the performance and contribution of banks are being recognized by an independent body in a transparent manner. on behalf of the state bank of pakistan and the organizers, i urge you all to participate and make this magnanimous event a success. i wish you all the very best.