banking business model. similarly, since it does not use asset securitisation as a risk transfer mechanism but only as a means of obtaining liquidity, the origination and acquisition of complex structured products has been avoided, which have proved to be substantially opaque and the cause of hefty losses for many institutions in various countries. this retail banking model was under debate before the financial crisis broke out in summer 2007, and many analysts considered it obsolete. however, it has proved to be more resilient in the current situation than the originate - to - distribute model which was used intensively in certain banking systems, and lies in fact at the heart of the crisis. other considerations aside, since the institutions hold on to the risks originated, the perverse incentives associated with the originate - to - distribute model have not been generated in the extension of credit and in its subsequent monitoring. a second factor why the international financial crisis did not directly impact the spanish banking system has been the banco de espana ’ s prudent regulation and supervision. i can offer two widely known and acknowledged examples. the first refers to supervision of credit institutions. the broad scope of this supervision acted as a deterrent for the creation and use of certain off - balance sheet vehicles. the second example refers to the area of regulation and, in particular, a system of provisions characterised by very demanding specific - purpose provisions and, especially, dynamic provisions. under this latter type of provisioning, which has been in force in our system since mid - 2000, latent risks and losses in upturns must be recognised, with the result that their build - up on banks'balance sheets has an immediate effect on institutions ’ income statements. obviously, the above - mentioned measures have not been sufficient to isolate spanish institutions from the financial crisis. these institutions have been hit in particular by the closure of various wholesale funding markets which they had turned to in previous years to finance part of the growth of their lending activity. the ability of spanish institutions to step up deposit - taking, as an alternative source of financing to wholesale funding markets, and the ecb and governments ’ measures have alleviated the liquidity shortage. however, time deposits cannot grow indefinitely at rates of above 20 % and, in fact, this source of funding will foreseeably peter out. similarly, it cannot be assumed either that the measures adopted to facilitate liquidity in the system and the structural characteristics of the spanish banking system, which i referred to before, are a foolproof

, the swiss franc is currently significantly overvalued. monetary policy is geared towards this challenging set of circumstances, and is guided by the snb's willingness to take an active role in the foreign exchange market and apply negative interest rates. this twopronged approach is designed to ease the upward pressure on the swiss franc. however, in the current climate there is, regrettably, no easy solution that would absorb all external disruptions. we must accept these challenging economic conditions for the time being. the snb is aware that many companies find themselves in a difficult situation. and it has great respect for the challenges facing switzerland's businesses and their staff. bis central bankers ’ speeches