##concilable. the minimum exchange rate does not restrict our monetary policy independence, as some observers wrongly claim. rather, it is a genuine expression of our monetary policy independence. the minimum exchange rate is not a move towards the euro and most certainly not any tie to the european currency. what it in fact does is to ensure appropriate monetary conditions for our country in an economic environment which remains extremely difficult. meanwhile, the value of the swiss franc is still high. in the long run, a central bank can only pursue an autonomous monetary policy in line with the needs of its country if it is independent. independence is therefore a further condition for ensuring that a central bank retains its freedom of action at all times. independence is more than an abstract construct. it gives the central bank the freedom to act swiftly, resolutely and credibly, if needed. what independence also means, however, is the responsibility to use this freedom strictly within the meaning of the statutory mandate, no matter what the prevailing political climate may be. independence cannot be taken for granted, it is a privilege. it was granted to us under the constitution in order that we could achieve the goal of price stability in the long term. as a counterweight to its independence, the snb has a duty of accountability and information with respect to parliament and the public. the snb is thus bis central bankers ’ speeches firmly anchored in our constitutional democracy. in a free society, an authority with a complete free hand would be a foreign body. favourable environment created by confederation and cantons yet independence must also be lived. the snb may not accept instructions from political authorities ; neither can it allow itself to be put under pressure by public opinion. it must conduct a monetary policy that serves the interests of the country as a whole, to the best of its ability, and in accordance with its mandate. it is only natural that our monetary policy cannot please everyone at all times. however, an independent central bank must not be put off by this. the relevant legislation contains a number of mechanisms designed to ensure the snb ’ s independence. one of these is our distribution practice, which has been developed on the basis of the provisions of the national bank act ( nba ). we are happy to make distributions to the confederation and the cantons ; we can only do so, however, where the balance sheet and annual results allow for this. as we announced some days ago, this will unfortunately not be the case for the 2013 business

priorities. at a later stage, the massive appreciation of the swiss franc threatened the economy at its core, creating a risk of deflation. the snb came to the rescue by injecting liquidity into the market, setting up the stabfund, intervening in the foreign exchange market and introducing the minimum exchange rate. our balance sheet is a reliable indicator of just how intense these interventions were. prior to the outbreak of the crisis at the end of 2006, the balance sheet total was just over chf 100 billion. today, it amounts to nearly chf 500 billion. in the area of financial stability, the snb, too, was entrusted with some new tasks, especially with regard to macroprudential measures. the countercyclical capital buffer as well as the designation of systemically important banks and their functions are probably the most well - known of these measures. on the whole, central banks around the world have thus far been successful in their role as firefighters. they managed to prevent the global economy from falling into a depression and to ensure price stability. in addition, in many countries, they worked side by side with their governments to shore up the banking system. this has bought some time – time that in numerous places should be used to solve the underlying problems. in many countries, bis central bankers ’ speeches measures that should be undertaken to achieve this include well - designed structural reforms of the economy and comprehensive restructuring of government finances. the downside of the central banks ’ success is that it could give the impression that treating the root of the structural problems is not necessary at all. to put it somewhat bluntly, this fallacy can be described as follows : now that the central banks have done so much to save the economy and the financial system from collapsing, they should be permanently in charge of ensuring sound economic growth, high employment, low interest rates and a healthy real estate market. such extremely high expectations are exceedingly dangerous. central banks would be forced into a role in which they had to fulfil tasks for which they neither have the requisite responsibilities nor the appropriate instruments. as a result, other agents could be induced to neglect their responsibilities. while the crisis might be delayed, it most certainly would not be overcome. it may appear politically opportune to put problems on the back burner, rather than working out solutions. in the long term, however, the cost to the economy and to society would be horrendous. what can central banks do