the us and the euro area. they expected a tightening of monetary policy in the us. meanwhile, the european central bank indicated that further extensive monetary policy easing measures would be necessary towards the end of 2014. 5 the diverging monetary policy outlook influenced exchange rates : the euro depreciated significantly against the us dollar. this in turn caused the swiss franc to weaken against the us dollar. broad - based euro weakness prevailed. the swiss franc neared the minimum exchange rate of chf 1. 20 per euro ( slide 5 ). we had to intervene to keep the snb ’ s commitment. in this context, the minimum exchange rate was no longer sustainable. defending it further would have entailed high costs in a number of respects : even bigger interventions, losing control of our balance sheet and losing credibility. for this reason, we decided to discontinue the minimum exchange rate on 15 january 2015. at the same time, we cut our policy rate to −0. 75 %. 6 the initial nominal appreciation in january 2015 was considerable. inflation in switzerland turned negative, before gradually rising again in the second half of 2015. negative interest and foreign currency purchases cushioned the appreciation and deflation to some extent in the following months. the appreciation was less pronounced in real terms over the course of 2015. the snb introduced the minimum exchange rate on 6 september 2011. the ecb in fact announced a large - scale quantitative easing programme on 22 january 2015. negative interest was introduced in december 2014 at a rate of – 0. 25 %. page 4 / 8 the ‘ swiss franc shock ’ was a major challenge for many companies. the sudden appreciation affected export - oriented firms in particular. in geneva, people queued to get euros to go shopping in france. retailers here had to lower their prices to keep customers. looking back, the swiss economy as a whole thankfully proved once again to be quite adaptable and innovative. 7 many businesses managed to absorb the shock by squeezing their profit margins further. they had to cut costs to remain competitive. gdp fell in the first quarter, but recovered over the course of the year. the increase in unemployment was only moderate. after the discontinuation of the minimum exchange rate, we remained active in the foreign exchange market. we no longer focused solely on a single currency – the euro – but on the overall currency situation. 8 foreign currency sales to counteract high inflation let us move forward to 2021. towards the end of the corona

second concentrates on the implementation of foreign exchange interventions : continuous development. and the third assesses whether foreign exchange interventions have contributed to fulfilling our mandate : ensuring price stability. the side effect : the large balance sheet first : what is the side effect? to fulfil its mandate, the snb significantly increased its foreign currency reserves and hence its balance sheet ( slide 8 ). it is important to note that the size of the balance sheet is the result of our monetary policy. in 2022, our balance sheet reached a record value of one trillion – i. e. one thousand billion – swiss francs. that is almost one and a half times switzerland ’ s gdp. the larger foreign currency reserves have a consequence : absolute profits and losses fluctuate strongly. these fluctuations mainly depend on developments on international financial markets. and from the fact that we cannot hedge our foreign currency risks. 10 in particular, the development of exchange rates, stock prices and interest rates influence our annual results. until 2021, we recorded high profits in most years ( slide 9 ). in 2020 and 2021, we were even able to significantly increase the profit distribution to the confederation and cantons, up to a maximum of chf 6 billion. that represented about 3 % of the federal government ’ s and the cantons ’ revenues. however, financial markets performed poorly in 2022. the swiss franc has also appreciated by 5 % in trade weighted terms. the snb recorded a loss of chf 132. 5 billion. we were unable to distribute any profits to the confederation and cantons. the side effect of foreign exchange interventions includes stronger fluctuations in the snb ’ s annual result. this is due to the size of the balance sheet and higher foreign currency risks. who bore this foreign currency risk previously? with the snb ’ s foreign currency purchases, the risks have shifted from the private sector to the snb. swiss companies and investors are also exposed to foreign exchange risks. they generate profits abroad or hold assets in other currencies. since 2009, swiss corporates and investors have increasingly repatriated their profits from abroad and hedged their currency risks. 11 this has increased the appreciation pressure on the swiss franc. the snb took on part of these risks to maintain price stability. currency risk is not hedged against the swiss franc as this would influence demand for swiss francs. switzerland holds substantial wealth abroad, on which dividends and interest payments are earned. also, the swiss economy earns