; since the start of the year alone it has increased by approximately 40 basis points. interest rates, which have reached a relatively lower level in this country, to some extent mitigate the economic burdens associated with the appreciation. they have probably also contributed to the slight recovery of the euro vis - a - vis the swiss franc in the past few days. in the first half of 2002, capital market rates were influenced by economic expectations in the united states. the positive economic data in march triggered a vigorous rise in long - term us interest rates by approximately 50 basis points within a very brief time. with economic indicators below expectations since april, long - term yields fell back to their mid - 2001 level. the expectations reflected in the futures markets concerning the development of money market rates – and therefore also monetary policy – have undergone a marked downward adjustment, notably for the us dollar, but also for the euro and the swiss franc. hopes of a vigorous and rapid economic recovery have given way to a more realistic assessment. the snb as asset manager in the context of its statutory mandate, the national bank manages sizeable assets ( table 1 ). in may 2002, their market value exceeded sfr 100 billion. the free assets ( sfr 21 billion ) are to be withdrawn from the national bank and allocated to other purposes. mr blattner will provide details on the management of the free assets. the monetary assets ( sfr 86 billion ) serve monetary purposes. claims from repo business ( sfr 16 billion ) reflect our money market activities on the assets side of the balance sheet, while swiss franc securities ( sfr 5 billion ) are available for absorption repos if necessary. foreign exchange reserves ( sfr 41 billion ) are at the centre of our activity as asset managers. at the end of 1997, the leeway previously granted solely for money market investments was legally extended. this provided a possibility to spread fixed - interest investments more evenly across various maturities and currencies and to widen the range of instruments. among the currencies ( graph 1 ), the us dollar and the euro predominate with shares of 42 % and 46 % respectively. the maturities of the investments extend over the entire interest rate curve, with the average maturity being around five years. in the debtor categories, government paper predominates, accounting for a share of more than 50 %. the rest comprises claims against international organisations and banks or bank - like borrowers with an above - average

three out of ten years. due to this fluctuation risk, but mainly because of the currency reserves required for the conduct of monetary policy, the national bank has to rely on adequate provisions. part of the earnings are to be allocated to provisions in order to enable these to grow in step with the swiss economy. the remainder is available for distribution to the confederation and the cantons. currently, the provisions are well funded. due in part to the high yields on foreign exchange reserves in the last few years, provisions exceeded the level aimed at by around sfr 13 billion at the end of 2001. this cushion makes it possible to increase the distribution to the confederation and the cantons over the next eleven years as agreed. with a view to the future, various decisions relating to investment strategy are beginning to take shape, aside from the transfer of the free assets. based on the consultation procedure it is becoming clear that the revision of the national bank law will again extend the leeway for investment. particular attention is devoted to corporate bonds, a significant investment segment. moreover, it must be examined whether and to what extent equities can improve the risk / return features of monetary assets in a meaningful way. in addition, the allocation of monetary assets to the various investment sectors must be optimised on an ongoing basis. such questions are studied and clarified internally. table 1 structure of the snb's assets ( may 2002, in chf billions ) monetary assets foreign exchange reserves reserve position in the imf gold holdings swiss franc securities claims from repo transactions ( net ) total monetary assets free assets gold holdings investments total graph 1