structures that are conducive to innovation, which may include a higher share of equity - finance relative to debt finance. second, financing the climate transition calls for bringing together private and public funding. principles need to be developed of how this can be done while ensuring debt sustainability, incentivising private financing, stimulating innovation and, at the same time, preventing a misallocation of resources or excessive risk - taking in the financial sector. third, as we enter a period of de - globalisation, surveillance of risks to financial stability needs to focus on fragmentation, which could make the financial system more fragile and increase the risk of contagion. [ 17 ] also, the link between international trade integration and financial integration needs to be better understood. fourth, we need to understand how policies beyond financial regulation affect financial stability. frictions in the real economy that delay the process of structural change may put a burden on banks ’ balance sheets and ultimately impair the functioning of the financial system. unviable firms in the real economy may not be forced to exit the market, while new, innovative firms may face barriers to entry if their business model threatens incumbents. [ 19 ] competition policy has an important role to play in ensuring that markets are contestable. fiscal policy needs to be carefully designed such that market entry and exit are not impaired. supporting firms that are not viable in the long - run may eventually have a negative effect on the balance sheets of financial institutions and impact their ability to finance the transition. at the current juncture, policymakers have to deal with many urgent issues all at once. it is now more important than ever for policymakers and academia to work together more closely – by defining the most relevant questions, enriching public policy debates with insights from academia, and thereby helping to find answers to questions faced by today ’ s societies. fußnoten : 1. my heartfelt thanks go to benjamin weigert, matthias weiß, and johanna winkel for their valuable contributions and comments on an earlier version of this text. any remaining errors and inaccuracies are entirely my own. 2. see https : / / www. imf. org / en / publications / weo / issues / 2022 / 04 / 19 / world - economic - outlook - april - 2022 [ https : / / www. imf. org / en / publications / weo / issues / 2022 / 04 / 19 / world - economic - outlook -

small open economy. with the negative interest rate, we can ensure that the traditional interest rate differential versus other countries is not eroded excessively. any further narrowing of the interest rate differential other hypotheses relating to the fall in the real interest rate are discussed in the economic literature. however, they are likely to provide less of an explanation than the factors of ageing and declining productivity growth. the adjusted method for calculating the exemption threshold takes effect on 1 november. the income the snb earns from negative interest is currently expected to almost halve. page 4 / 8 would increase the upward pressure on the franc, which would lead to lower economic growth and higher unemployment. the measures taken by the central banks to combat the financial and economic crisis – low policy rates, forward guidance on the expected course of short - term interest rates, and securities purchases – have undoubtedly increased downward pressure on the general level of interest rates in the short and medium term. but the decline in capital market rates, which we saw in the chart earlier, began long before the outbreak of the crisis. this reinforces the notion that when interest rates fall, it is the aforementioned powerful structural drivers which are at work – i. e. persistently lower inflation expectations, greater propensity to save and lower propensity to invest. from today ’ s perspective, therefore, the neutral interest rate that is relevant for monetary policy is also below previous empirical levels. consequently, shortterm interest rates could remain below their usual levels even if the central banks normalise monetary policy again at some point in the future. longer life expectancy – success story and challenge ladies and gentlemen, the low interest rate environment is a challenging situation for pension funds. and i cannot even give you an idea of when switzerland will be able to return to positive interest rates. all i can say is that the timing will greatly depend on developments in the global economy and the performance of the international financial markets. another challenge that is sure to preoccupy you as pension fund managers is that of rising life expectancy – on the face of it a very gratifying development and, indeed, one of humanity ’ s success stories. rising life expectancy is not only influencing the propensity to save but is also having a direct impact on the pension funds. given an unchanged retirement age, it steadily lengthens the average duration of pension payments. this in turn results in higher payments and extra strain on the pension funds. the consequences of these developments