policy, it does provide some guidance. households and companies can continue to plan for stable prices in switzerland in the future. conclusion let me conclude. central banks'risk management approach, which is guided by pragmatism, consistency and determination, has served us all well in the fight against inflation so far. we are well advised to stick to this approach. at the same time, we must keep a medium - term orientation and communicate this clearly to the public and the markets. when the monetary policy outlook is very uncertain, an exchange of views as well as the sharing of experiences and research findings between economists from universities and central banks are particularly valuable. that is why i am very much looking forward to the discussions and presentations at this conference. thank you for your attention. 3 / 3 bis - central bankers'speeches

be funded with interest - bearing debt capital. moreover, the expansion of the balance sheet will substantially increase the snb ’ s credit and currency risks. strengthening the snb ’ s provisions the financial crisis has highlighted how important it is for the snb to have a solid equity capital buffer. without it, the snb would be unable to carry the risks on its currency reserves internally – nor would it be in a position to take the measures to stabilise the financial system that proved essential in the financial crisis. equity capital, furthermore, is central to the independence and credibility of the snb. in spite of the extensive crisis measures we have taken, the snb ’ s balance sheet is as robust as ever – though its financial stress resistance is heavily dependent on the distribution reserve, which is high at present. like the provisions, this forms part of the snb ’ s equity capital. in the short term it helps to absorb any losses, while in the longer term it is transferred to the confederation and the cantons as a distribution of profits. if it were not for the distribution reserve, the snb ’ s resilience could only be guaranteed to a limited degree. there are two reasons for this : for one thing, a need for measures to safeguard the system could arise unexpectedly, greatly increasing the risks faced by the snb suddenly ; and for another, these risks are significantly higher because of the permanently expanded balance sheet. the snb has therefore decided to additionally strengthen its equity capital, and thus its balance sheet. the snb ’ s ability in the long term to respond to a crisis must not be dependent on the distribution reserve. this is only possible if the snb increases its provisions from their current level. in the past, it increased its provisions each year at a rate equal to average nominal gdp growth for the previous five years. the snb now intends to double this allocation in financial years 2009 – 2013 : instead of approximately chf 1. 5 billion, some chf 3. 0 billion will now be allocated to provisions in 2009. strengthening provisions will reduce the potential for future profit distributions to the confederation and the cantons. on a current view, however, the annual profit distribution of chf 2. 5 billion can be expected to be maintained until 2017, when the current agreement on profit distribution lapses. this view is substantiated, in particular, by the fact that the distribution reserve will increase considerably as a result of the profit expected for the year