same sales period. an additional profit of more than chf 900 million was therefore realised. at the end of the sales programme, the national bank still held 1, 290 tonnes of gold, corresponding to one third of the value of its currency reserves. even though it has been demonetised, the yellow metal still plays an important role in our reserves. it is an asset category that traditionally affords good protection in times of crises in the international monetary system. it also allows us to hold part of our reserves on our own country, which is not possible with financial assets. moreover, as expressly requested by parliament, article 99 of the federal constitution requires the national bank to hold part of its currency reserves in gold. the governing board considers that the holdings of 1, 290 tonnes are appropriate to the current international environment. it does not intend to proceed with further sales of gold. distribution of profit this general meeting of shareholders will find a special place in the national bank's annals, as you are going to decide on how the proceeds of the gold sales are to be distributed. this will close a chapter first opened in 1997, when a group of experts came to the conclusion that the snb's currency reserves were larger than required for the execution of its mandate and that it could thus consider selling half its gold holdings, once the swiss franc's gold parity was discontinued. as you know, the governing board adopted the expert group's conclusions and indicated to the federal council that, based on the profit figure following revaluation, an amount corresponding to half the gold holdings could be earmarked for purposes other than monetary policy. the possible uses for the sales proceeds have been the subject of much political debate. none of the proposed solutions have succeeded in attracting a consensus among the population or in the federal parliament. on 16 december, the parliamentary debate was concluded without an agreement being reached. thus, a sum of chf 21. 1 billion, corresponding to the proceeds of the gold sales, has been included in the usual profit distribution procedure. some people fear that, following this transfer, the national bank will no longer have sufficient currency reserves. i have a word of reassurance for them. this issue has been examined in depth and has been discussed by our bank council. our currency reserves total chf 60 billion – an amount which may be considered appropriate by comparison with other industrialised countries. but nor are these reserves excessive. furthermore, it is important that the currency reserves evolve

be funded with interest - bearing debt capital. moreover, the expansion of the balance sheet will substantially increase the snb ’ s credit and currency risks. strengthening the snb ’ s provisions the financial crisis has highlighted how important it is for the snb to have a solid equity capital buffer. without it, the snb would be unable to carry the risks on its currency reserves internally – nor would it be in a position to take the measures to stabilise the financial system that proved essential in the financial crisis. equity capital, furthermore, is central to the independence and credibility of the snb. in spite of the extensive crisis measures we have taken, the snb ’ s balance sheet is as robust as ever – though its financial stress resistance is heavily dependent on the distribution reserve, which is high at present. like the provisions, this forms part of the snb ’ s equity capital. in the short term it helps to absorb any losses, while in the longer term it is transferred to the confederation and the cantons as a distribution of profits. if it were not for the distribution reserve, the snb ’ s resilience could only be guaranteed to a limited degree. there are two reasons for this : for one thing, a need for measures to safeguard the system could arise unexpectedly, greatly increasing the risks faced by the snb suddenly ; and for another, these risks are significantly higher because of the permanently expanded balance sheet. the snb has therefore decided to additionally strengthen its equity capital, and thus its balance sheet. the snb ’ s ability in the long term to respond to a crisis must not be dependent on the distribution reserve. this is only possible if the snb increases its provisions from their current level. in the past, it increased its provisions each year at a rate equal to average nominal gdp growth for the previous five years. the snb now intends to double this allocation in financial years 2009 – 2013 : instead of approximately chf 1. 5 billion, some chf 3. 0 billion will now be allocated to provisions in 2009. strengthening provisions will reduce the potential for future profit distributions to the confederation and the cantons. on a current view, however, the annual profit distribution of chf 2. 5 billion can be expected to be maintained until 2017, when the current agreement on profit distribution lapses. this view is substantiated, in particular, by the fact that the distribution reserve will increase considerably as a result of the profit expected for the year