##roner as substitutes. the peg is a political decision with a clear mandate. it enjoys support from across the political spectrum and it is well understood by market participants. the framework implies a clear division of responsibilities in economic policy - making. monetary - policy interest rates are reserved for keeping the krone stable. when setting rates we do not take into account factors such as inflation, growth, employment and house prices. these considerations are addressed by other economic policies. in particular, fiscal policy plays an important role in ironing out economic fluctuations. the policy framework has been the foundation for a stable macroeconomic environment with low inflation and relatively modest business - cycle fluctuations. slide 5 : fixed exchange rate introduced after a period of high and volatile inflation the fixed exchange - rate regime was introduced on the basis of an unsustainable macroeconomic situation in the 1970s and early 1980s. unemployment was high and there were recurrent deficits on the government budget balance as well as on the balance of payments. furthermore, repeated devaluations targeted at restoring competitiveness only resulted in high and volatile inflation and high interest rates. side 2 af 13 in contrast, the german bundesbank managed to maintain low and stable inflation by the standards of that time. since germany was denmark's largest export market, it was decided to link the krone to the d - mark. as a result, danish inflation approached that of germany. the same holds for short - term as well as long - term interest rates. slide 6 : danish monetary - policy rates tightly linked to ecb rates an exchange - rate peg can only be maintained if one is willing to implement the same monetary - policy stance as the anchor country. this is a precondition in a world with international capital mobility. it implies that most of the time, danish monetary policy rates follow those of the ecb. if the exchange rate tends to deviate from the central rate, we first intervene in the fx market by either buying or selling kroner against foreign currency. if this does not have the desired effect on the exchange rate the next step is to change policy rates. as we keep the exchange rate very stable, volatility in the fx market cannot be detected by looking at a chart of the exchange rate. instead it is reflected in the response of monetary policy. for example, if there is pressure on the krone to depreciate against the euro this will lead to a reduction in our foreign - exchange reserves and an increase in the

ladies and gentlemen, on behalf of the snb, thank you for all the work you do. we broke new ground with respect to informing the public as well, introducing ‘ swiss banknotes ’ – an augmented reality app with which users can explore the new series. we are page 3 / 4 berne, 3 september 2019 thomas jordan news conference on new banknotes convinced that this innovation has helped to make the design and security features of the banknotes more accessible, especially to younger generations. so what happens to the eighth - series notes now? the old banknotes remain legal tender until further notice and can thus continue to be used for making payments. the snb plans to announce the recall date for the eighth - series notes in the course of 2020. from the recall date onwards, the old notes lose their status as legal tender and can then only be exchanged at the snb or one of our agencies. the future of cash in the digital age i would like to finish by looking to the future. the digital transformation taking place in our economy is also affecting developments in the payments arena. as part of its statutory mandate, the snb must not only ensure the supply and distribution of cash but also facilitate and secure the operation of cashless payment systems. a well - functioning payment system is critical for our economy. technological progress is also changing customers ’ expectations and needs in terms of cashless payments – for instance as regards speed and user - friendliness. in this area too, the snb is a participant in innovation. specifically, we are ensuring that swiss interbank clearing ( sic ) – our country ’ s powerful infrastructure for transacting cashless payments in swiss francs – continues to work quickly and efficiently and thus remains as attractive as possible. promoting and ensuring both the supply of cash and the smooth functioning of cashless payments is no contradiction. the various payment methods satisfy the differing needs of our population. our latest survey on payment methods, published in may 2018, showed that the public ’ s use of – and affinity for – cash remains high. it also confirmed that the swiss population like to be given the choice between paying cashless or paying with notes and coins. banknote circulation in our country has increased steadily in recent years. cash is used and valued for a variety of reasons, and not just out of habit or reluctance to adopt new technology. cash can be used everywhere and is less dependent on technical infrastructure. cashless payments are likely to become more important over time. i am nevertheless