of the crisis. this is contributing to the pick - up in the german economy, ahead of the others in the euro area. the currency movements of, for instance, the swiss franc in the last few months suggest that if the old national currencies still existed, german exports would risk becoming much less competitive. let me hasten to add that germany ’ s good economic performance is not solely attributable to the euro. in fact, the country ’ s economy has proved more capable than others of exploiting the opportunities provided by the euro, in particular by keeping costs under control for many years and ensuring sound public finances in good times. other countries haven ’ t exploited the benefits provided by the euro so well, or they wanted too much too quickly and at a certain point they came face to face with reality. we need to make changes that prevent such excesses from happening again in the future. to sum up, there is nothing to change in the monetary set - up. the problem is in the economic dimension of emu. there are two fundamental elements to address to improve the “ e ” of emu. one is public finances. there ’ s been a lot of talk on this subject, and some decisions too. there is a need for more rules to constrain national budgets. there is also a need for an effective safety net, one that can prevent a crisis from spreading within the euro area as a result of a lack of discipline by one of its members. several changes have been implemented and a few more are required to ensure that the system is effective. in this field we don ’ t need to innovate. the imf ’ s experience should be a useful guide. european countries, including germany, have been members of the imf for more than 60 years. european taxpayers have never lost money from imf operations. the other element to consider is an avoidance of imbalances, such as those which have emerged over the last decade. they have been the result of a loss of competitiveness and excessive reliance on external borrowing. these two factors have to be tackled. in my view they cannot be addressed through simple rules and micro - management, because the various economies have different structures. they require a change in governance of the euro area along two dimensions, which i will briefly consider. the first is competitiveness. the debate has rightly turned to that factor, especially in recent weeks. it ’ s a welcome move. last autumn, the european

news conference berne, 14 december 2017 fritz zurbrugg introductory remarks by fritz zurbrugg in my remarks today, i would like to address some of the developments currently taking place in the field of financial stability. i shall look at the big banks first before turning to the domestically focused banks. i will conclude with a few words on the new banknote series. big banks as thomas jordan has already noted, the international economic environment has continued to improve since the last news conference in june. conditions on the financial markets have remained stable. premia for bank credit default swaps, for instance, have barely changed since june. premia have thus settled at lower levels again following the turbulence in 2016. against this positive backdrop, both of switzerland ’ s big banks remain on track to meet the requirements of the ‘ too big to fail ’ regulations with respect to resilience. this first pillar of the regulations covers requirements pertaining to the going - concern loss - absorbing capacity of systemically important banks. both credit suisse and ubs already comply fully with the final 1, risk - weighted requirements. however, further improvement is needed with respect to the leverage ratio. both of the big banks have also made progress on the second pillar of the regulations, ‘ resolution ’, which covers the orderly restructuring and wind - down of a bank that can no longer function as a going concern and is thus deemed to have become a gone concern. with a view to managing such a crisis scenario, credit suisse as well as ubs have increased their gone - concern loss - absorbing capacity by issuing further bail - in instruments, which can be converted into equity in the event of impending insolvency. as we explained in our financial stability report published in june, since the ‘ too big to fail ’ regulations came into force, 1 final requirements refer to the requirements that will apply after expiry of all transitional provisions, and in particular to the qualitative requirements for going - concern capital. page 1 / 3 berne, 14 december 2017 fritz zurbrugg news conference credit suisse and ubs have also taken important organisational steps to improve their resolvability. despite these positive developments, the two big banks still need to make further progress if they are to fully comply with the second - pillar requirements. this applies both to their gone - concern loss - absorbing capacity and their resolution planning. full compliance with all of the ‘ too big to fail ’ requirements will further strengthen the big banks