##ency through one integrated set of limitations on their capital distributions. originally, we had planned to make the scb final for the 2019 stress test cycle. however, we received thorough and insightful feedback on the proposal that we have been considering carefully. among the comments we received were many that called for further simplification of 2 / 5 bis central bankers'speeches the scb framework. based on this feedback, i first would like to emphasize two elements of the 2018 scb proposal that, in my more considered judgment, i now believe should not be a part of the final scb framework. second, i would like to introduce two new co - equal options, either of which would improve the final product. the first element of the scb proposal that i believe should be removed is the stress leverage buffer requirement. 1 by its nature, a leverage ratio is a blunt instrument that treats all assets the same and therefore is not risk - sensitive. thus, i am concerned that explicitly assigning a stressed leverage requirement to a firm on the basis of risk - sensitive post - stress estimates is in conflict with the intellectual underpinnings of the leverage ratio. it is what the analytical philosophers call a category mistake : like saying that, “ freedom has curly hair ". of course, leverage ratios, including the enhanced supplementary leverage requirements, would remain a critical part of our regulatory capital regime, and i believe our existing leverage ratios provide a sufficient backstop to the risk - based capital requirements. for these reasons, it seems out of place and unnecessary to add a separate leverage capital buffer. 2 the second element of the scb proposal that i believe should be removed is the requirement for banks to pre - fund the next four quarters of their planned dividend payments. the stress tests currently require banks to set aside sufficient capital today to “ pre - fund ” expected capital distributions, both dividends and repurchases, for all nine quarters of the capital planning horizon. removing the pre - funding of dividend requirement would simplify the scb proposal. additionally, the scb already has a mechanism for curbing dividends and other distributions when a bank ’ s capital ratio falls into the buffer. requiring pre - funding of dividends is a needless redundancy. even worse, the pre - funding of dividends could lead to a conflict with the mechanics of the scb — the scb could call for a restriction of dividend payments even when those payments had been pre - funded. i believe

philipp hildebrand : thoughts on asset management in switzerland summary of a speech by mr philipp hildebrand, member of the governing board of the swiss national bank, at the swiss funds association, berne, 28 march 2006. the complete speech can be found in german on the swiss national banka€™s website ( www. snb. ch ) * * * summary asset management is an important source of earnings for banks in switzerland. the financial industry, in turn, is the largest sector in the swiss economy and of crucial importance for economic development. assuming that the world economy stays on its expansionary course, global assets will continue to grow strongly. moreover, the rapid increase in the volume of accessible information means that clients are often better informed. it is also giving rise to a broader product range and generating tougher competition and cost pressure amongst providers. these trends will bring about far - reaching changes in asset management over the medium term. money market, equity and bond investments managed on a moderately active basis often fail to pay the consistently above - average yield that would warrant their costs. they will probably lose ground to passively managed, inexpensive products. substantially better performance will be essential for the traditional products that remain. alternative investments, too, will benefit from the structural changes. however, this area will continue to be affected by the limited supply of exceptional portfolio management expertise. asset management in switzerland compares fairly well on an international scale in terms of performance and operational efficiency. however, the industry must lose no time in tackling the restructuring that is needed, particularly in the traditional segments. in the area of alternative products, switzerland has admittedly been successful in the fund of funds business. it is to be hoped that its financial industry will build on this success and become even more of a centre of excellence for alternative investments too.