jean - pierre danthine : financial stability developments and the delayed new swiss banknotes introductory remarks by mr jean - pierre danthine, vice chairman of the governing board of the swiss national bank, at the media news conference of the swiss national bank, berne, 13 december 2012. * * * in my introductory remarks today, i would like to look at the main developments in the area of financial stability since the publication of our financial stability report in june of this year. afterwards, i will talk about the postponement of the new banknote series. in the area of financial stability, the improvement in the big banks ’ capital situation is particularly noteworthy. the prevailing uncertainties and the risks for the banking sector as a whole remain considerable, however. prevailing risks remain considerable general economic and financial conditions for the swiss banking sector remain difficult. on the one hand, the situation in the financial markets has eased since june 2012. this is largely due to various decisions and measures taken by governments and central banks worldwide. on the other hand, the easing of tensions in the financial markets should be interpreted with caution. should the measures already taken not be effective or should the progress made in restructuring government budgets be slow, we cannot rule out renewed turbulence in the financial markets. the european banking industry is also in a fragile state. although cds premia for european banks have been going down in the last few months, their level is still considerably above previous years as well as that of swiss and us banks. finally, as my colleague thomas jordan has explained, the global economic outlook remains modest. for europe, in particular, we have revised our short - term forecast downwards again slightly. for switzerland, the national bank is expecting moderate growth. economic conditions remain comparatively good, which – in conjunction with the low level of interest rates – is boosting the continued strong momentum in the mortgage and real estate markets. i will speak about developments in this market in more detail later on. to sum up, the risks in the banking environment remain considerable. first, the risk of an escalation of the european debt crisis is not insignificant. second, imbalances are building up in the swiss real estate market. this goes hand in hand with an increased risk of significant price corrections in the medium term. greater resilience of the big banks the situation of the big banks has improved since the last news conference, as both institutions have further increased their resilience. this increase was particularly pronounced at credit suisse. according

standard today, as a result of this commitment to quality. this means that the snb is not under any pressure to roll out a new banknote series quickly. the new series must meet very high security, quality and technical production standards – and will have to do so for at least 15 years after its first release. so it is worth taking the time to ensure that the new security features, which are complex, technologically innovative and have never before been applied to banknote design, can also stand up to the rigours of industrial production processes. a number of tests are currently being carried out. the first denomination in the new series – the 50 - franc note – will not be issued until 2015 at the earliest. we will announce the exact issue date as soon as production of the first banknote denomination has been completed. bis central bankers ’ speeches