##fund. this development, together with the results of a comprehensive cash flow projection for the entire portfolio, confirm the snb in its view that it has unimpaired prospects of receiving repayment of the loan in full. however, these calculations are bedevilled by great uncertainty – and the risk to the snb remains substantial. as the stabfund values much of its portfolio at amortised cost, the recovery in the financial markets has only modest effects on its financial reporting. the cumulated loss at the end of the third quarter ( since 1 october 2008 ) was usd 4. 4 billion. equity capital reported thus remains negative, though this loss was entirely covered at the time by the secondary loss protection – the warrant for the purchase of 100 million ubs shares at nominal value. by the end of the stabfund ’ s first financial year it will have largely completed the build - up of its operating activities. in the last few months, following the asset transfer phase between december 2008 and april 2009, the asset management process was set up, risk monitoring and financial reporting expanded, and an internal control system and operational risk management introduced. these processes will be further improved next year, with asset management taking on a key role. while the intrinsic values of the assets represent a key element in managing the portfolio, the process must not be merely mechanistic. now that it has been possible to sell off some of the more liquid assets over the last few months, attention will focus more closely on two tasks : minimising the larger concentration risks, and ensuring that – as the portfolio is disposed of – the best possible equilibrium is maintained in various respects, including the degree of liquidity of its holdings. broadening participation in the swiss franc repo market the unsecured money market collapsed when the financial crisis broke out in august 2007 and it has not properly recovered to this day. the repo market, conversely, in which money is lent against securities, has emerged as a crisis - resistant mainstay of the financial system. the efficient swiss repo system – through which the snb conducts its normal monetary policy transactions – has proved to be especially robust. the snb depends on a liquid swiss franc money market for the efficient implementation of its monetary policy. this is why, in addition to domestic banks, foreign banks were admitted to the swiss franc repo market as long as ten years ago. from 2010, the snb will open the repo market to

financial market participants in switzerland ( including liechtenstein ) that do not enjoy the status of banks. however, these new participants will have to be supervised by finma ( or the regulatory authorities in liechtenstein ), and they must be genuinely active in the swiss franc money market. furthermore, they will have to guarantee that business will be transacted in a professional manner. the initial candidates are likely to be insurance companies with significant treasury activities in swiss francs, and possibly managers of swiss franc money market funds. in expanding participation in the repo market, the snb is seeking to further increase the liquidity of the swiss franc repo market. in this way we plan to further promote the secured money market and increase the stability and crisis resistance of the financial system.