, where the degree of resource utilisation is more than satisfactory, demand should stabilise. for 2010 as a whole, the snb expects real gdp growth of between 0. 5 % and 1 %, following a decline of around 1. 5 % in 2009. changes in monetary and financial conditions overall, monetary conditions are a reflection of our expansionary policy, especially with respect to interest rates and the monetary aggregates. the libor is currently at the level targeted since march this year, i. e. 25 basis points, a level which can be regarded as a floor. the fact that it was impossible to bring the rate down any lower than this led us, in march, to introduce other instruments in order to make our monetary policy as expansionary as the circumstances demanded. monetary conditions have become more expansionary via the interest rate channel in particular. indeed, credit premia on the capital markets have declined steadily since the beginning of the year. as yields on confederation bonds have remained low, other long - term yields have also trended downwards. it has thus become cheaper for companies to raise funds by borrowing on the capital market. in addition, our figures show that financing in the form of bank loans has also become more attractive following the decline in the libor. in real terms – i. e. after factoring in expected inflation – interest rates are even lower. the swiss franc has appreciated slightly in trade - weighted terms, as a result of the recent weakening of the dollar. however, it has remained stable against the euro, which shows that the monetary policy followed since march has been effective. an appreciation of the swiss franc against the euro would run counter to the relaxation in monetary conditions brought about through the interest rate channel. this is why the snb will continue to act decisively to prevent any excessive appreciation of the swiss franc against the euro. an assessment of monetary conditions can be misleading if it is based on prices, which, like currently the libor, have reached a bound. for this reason, an assessment based on quantities – money and credit – is particularly important in the current circumstances. the monetary base has increased substantially since october 2008, when the financial crisis entered a new phase following the collapse of lehman brothers. we supplied the interbank market with sufficient liquidity to meet burgeoning demand in a climate of uncertainty, in order to prevent any increase in money market rates. since then, precautionary base money demand has declined and we have

is still associated with downside risks. if these risks materialised, we could again be faced with the threat of deflation. the uncertainties relate to the global economy and to the level of recovery within the financial industry. these factors have persuaded the snb to opt for a cautious stance, and it is leaving its monetary policy course unchanged for the time being. strengthening the snb ’ s equity capital on 4 december, the snb bank council decided to strengthen the snb ’ s equity capital by doubling the allocation to provisions over the next five years. this decision was prompted by the growth in market and credit risks in the snb ’ s balance sheet ( creation of the snb stabfund and the increase in currency reserves ). given the high level of the distribution reserve and results expected for 2009, this decision should not pose problems in terms of the distribution of profits, in the amount of chf 2. 5 billion annually, up to the end of the period agreed with the confederation and the cantons ( 2017 ). my colleague thomas jordan will address these aspects in more detail in his own introductory remarks.