swaps meet these requirements very well. however, the snb lacked a separate liquidity - absorbing instrument to handle large volumes. we therefore introduced our own debt certificates – snb bills – to our range of instruments in october. snb bills allow us to be more flexible in steering liquidity. consequently, we are now in a position to offer more long - term transactions, which help calm the money markets and facilitate the steering of the threemonth libor. the financial market crisis has also shown us that the liquidity - shortage financing facility can only contribute to calming the situation in the money markets if it is actually used when needed. however, even during the crisis, it was rarely called upon. the reason for this being that the direct costs of drawing on it were relatively high, as were the indirect costs ensuing from the stigma associated with using the facility. the snb has thus decided to lower the direct and indirect costs of using the facility. to start with, we will reduce the special - rate interest premium from 200 basis points to 50 basis points. this will become effective from 1 january 2009. the snb will also make some changes to its reporting methods. in order to protect the borrower ’ s reputation, claims from the liquidity - shortage financing facility will, in future, no longer be reported separately. these two measures should encourage banks to utilise the facility ’ s limits more frequently and therefore increase their liquidity provisioning. we have also found that, in periods of turbulence, some of the data reported in our weekly publication important monetary policy data are misinterpreted, which can have a destabilising effect. to remedy this, we have decided to discontinue the real - time announcement of individual transactions and facilities. the only data relevant for the assessment of the situation in the money market are those on sight deposits and interest rates. we will therefore continue to publish these on a weekly basis. from now on, data on individual balance sheet items and monetary policy operations will only be published in the snb ’ s monthly statistical bulletin. thus, the snb essentially continues to report on its monetary policy operations in a transparent manner, the only difference being that certain data will be published less frequently. our guidelines on monetary policy instruments have been revised accordingly. these will enter into effect on 1 january 2009. transaction with ubs on 16 october, the snb announced that it had concluded an agreement with ubs on the long - term financing

as the reserve - issuing country has the privilege of not being under much pressure to adjust to current account deficits, at least over the short and medium term. it is worth noting that part of keynes ’ goal in setting up the imf was to try to create symmetry between the need to adjust for both deficit and surplus countries. more recently, the question appeared under the perspective of global imbalances. this discussion highlights that current account surplus countries can forego, at least temporarily, the required adjustment by accumulating international reserves instead. the sustainability of these imbalances, and the extent to which they have contributed to the recent global financial crisis, is still under discussion. the question of the reserve asset has often been at the center of the debate. but as mark carney has recently argued, the adjustment mechanism may be more important than the choice of reserve assets. if adjustment were rapid, symmetric, and global, and if adjustment costs were fairly distributed amongst countries, we probably would not need to gather here today. unfortunately, this is not the world we live in now. historically, exchange rate flexibility has often been the answer. while it is not a silver bullet, it remains true that adjustment through the exchange rate is usually faster, and in the end less costly than adjustment through prices and wages. at the same time, of course, discontent with what is often perceived as excessive exchange rate volatility has been an important source of dissatisfaction with the present international monetary system. what constitutes excessive exchange rate volatility, and whether domestic policies or the international monetary system are at the root of it, is a matter of legitimate debate. iii. the conference nearly twenty years ago, jacob frenkel made the following observation about the international monetary system : “ academics and policymakers have made numerous proposals for reform while, at the same time, the monetary system itself has been in a constant state of change ”. this points to another problem that any attempt to reform the international monetary system faces : the world economy and financial markets, and therefore the international monetary system never cease to evolve. today ’ s conference is organized around four panel discussions. they will focus on issues that are at the forefront of the current debate on shortcomings of the international monetary system. the first panel, chaired by axel weber, will discuss the predominant concerns about the present system. large global imbalances, volatile capital flows, and rapid reserve accumulation give rise to concerns about vulnerabilities. are they possible sources