had been under pressure since 1996. here in washington, intense discussion revolved around the question of whether the imf should sell gold. moreover, the gold policy of the future european monetary area had been subject to intense speculations. the market feared that once the european monetary union came into force, the participating central banks or governments would lose their inhibition about selling off parts of their 12 ’ 000 tonnes of total reserves. in may 1999, the announcement by the uk treasury that it planned to sell 415 tonnes set a new wave of producers hedging activity and front running speculation. the gold price dropped by 10 % to 252 usd / oz, a 20 year record low ( see figure 3 ). it is against this background of heightened speculation about wide - ranging central bank gold sales and corresponding market anxiety that the joint statement on gold was signed at the imf meeting in washington on september 26, 1999. the participating central banks undertook to sell a total amount of no more than 2, 000 tonnes of gold in the next five years, with annual sales limited to approximately 400 tonnes. the fifteen central banks furthermore agreed not to expand their gold lending and gold forward transactions during this period. while the u. s. and japan were not part of the joint statement, they declared that they had no intention of changing their “ passive ” gold policy. furthermore, the imf announced that it would abandon its plan to sell some of its gold reserves in the market. these declarations had a big impact on the market for two reasons : first, they removed the uncertainty about the behaviour of the holders of 85 % of the world ’ s official gold reserves. second, the planned annual total sales ( 400 tonnes ) compared favourably with the sales and increases of gold lending activity of the previous years ( 700 tonnes ). the idea of a swiss foundation of solidarity was suggested to the president of the swiss confederation by the then president of the governing board of the snb. the washington joint statement on gold was a coordinated effort aiming at clarifying the intentions of the participants in a market prone to rumours and secrecy. of the 1, 300 tonnes of gold which the swiss national bank intended to sell, 1170 tonnes were included in the 2000 - tonne total sales quota of the washington agreement. in other words, the snb ended up being the main beneficiary of the agreement. formally, the initiative for the washington agreement did not come from the snb. nonetheless, the snb ’ s unilatera

jean - pierre roth : switzerland - a financial centre in the heart of the euro area summary of a speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the belgian financial forum, brussels, 16 february 2004. the complete speech can be found in french on the swiss national bank ’ s website ( www. snb. ch ). * * * switzerland is not a fortress. in relation to the rest of europe in particular, it is an economy that is very much open to mutual exchanges - notably with regard to trade and finance. it is not by chance that switzerland has become a major financial centre. this can be ascribed to a number of positive factors, including specialist knowledge, a long - established banking tradition, the quality of the financial infrastructure, and customers ’ confidence in the soundness of the country ’ s financial institutions. switzerland ’ s political stability, its high level of savings and the international standing of the swiss franc have also enhanced the appeal of its financial system. increasingly, however, switzerland is not alone in offering such advantages. moreover, the swiss financial centre - like all the others - has to face the challenges of globalisation and the fight against financial crime. as banking secrecy does not afford any protection to funds of dubious origin, the swiss authorities are able to combat money - laundering with a reasonable degree of efficacy. in this area, switzerland has implemented measures that have received international recognition. the introduction of the euro has profoundly changed the environment in which the swiss economy operates. since 1999, the swiss franc has coexisted quite harmoniously with the euro. in fact, the franc has been more stable against the euro than it was against the d mark. this is good news for swiss companies exporting to the european market. on the other hand, such companies have to contend with a greater concentration of foreign - exchange risks. they are responding to this challenge with hedging policies that are more active than those pursued in the past. pegging the franc to the euro in order to eliminate exchange - rate risks would entail more problems than advantages, as it would inevitably push up the level of interest rates in switzerland. against this backdrop, the national bank is continuing to pursue an independent monetary policy that takes account not only of economic trends and inflation forecasts but also of the situation on the foreign exchange markets.