bonds are currently negative yielding ( slide 2 ). however, switzerland is certainly not the only country witnessing this scenario, which has now become a global phenomenon ; some 17 states are currently reporting sub - zero yields on government bonds and, overall, more than a quarter of government bonds outstanding worldwide are trading at negative yields. on the foreign exchange markets, the us dollar and pound sterling have depreciated on a trade - weighted basis since the beginning of the year ( slide 3 ). the weakening of the pound is principally due to uncertainty surrounding next week ’ s eu referendum in the uk. however, the japanese yen – and, albeit to a lesser extent, the euro – have appreciated despite the monetary policy easing of the respective central banks. the swiss franc has moved within a narrow range, appreciating only slightly since the beginning of the year. this is likely due in part to the snb ’ s monetary policy – that is, to the negative interest rate and our willingness to take an active role in the foreign exchange market, as necessary. experience of negative interest rates this brings me to our experience of negative interest. for about one and a half years, we have been charging negative interest of – 0. 75 % on sight deposits held by banks and other bis central bankers ’ speeches financial market participants at the snb. as thomas jordan has already explained, negative interest helps to maintain the interest rate differential between the swiss franc and other currencies. this differential is necessary in order to make investments in swiss francs less attractive. if interest rates in switzerland were the same as those abroad, swiss franc investments would clearly be favoured in the current environment. negative interest thus helps ease upward pressure on the swiss franc. the negative interest rate continues to have the desired effect on the money and capital markets. money market rates have been tracking close to the snb ’ s negative interest rate for a number of months now. money and capital market interest rates have fallen by over 60 basis points since the introduction of negative interest ( slide 4 ). interest rates on bank loans have reacted much less strongly to negative interest, however. the snb does not charge negative interest on all sight deposits, but grants banks and other financial market participants exemption thresholds, so that the banking system does not have to carry the full burden resulting from the high level of sight deposits. due to the significant expansion of liquidity, most banks have now completely exhausted these exemption thresholds. if the snb supplies

welcome address twelfth asia - pacific high level meeting on banking supervision jointly organised by the basel committee on banking supervision ( bcbs ), the financial stability institute ( fsi ), and the executives ’ meeting of east asiapacific central banks working group on banking supervision ( emeap wgbs ), hosted by bank indonesia “ taking stock of post - crisis regulatory reforms in indonesia – progress made and challenges ahead ” bali, indonesia, 22 - 23 march 2017 remarks by mr. erwin rijanto, deputy governor of bank indonesia honorable mr. fernando restoy, chairman fsi, bis mr. nestor a. espenilla, chairman emeap wgbs and deputy governor bank of sentral ng pilipinas, mr william coen, secretary general bcbs, bis and fellow delegates from financial stability authorities and representatives of the financial industry good morning to all of you, 1. it is my pleasure to welcome you to the 12th asia - pacific high level meeting on banking supervision. together with the bank for international settlement and emeap, bank indonesia is honoured to host this event in the beautiful island of gods. 2. in my welcome address today, i will slightly touch upon the global financial sector reform initiatives to give a flavour of the speech and emphasize more on the progress and challenges in indonesia. i would like to highlight that the progress so far is due to the joint efforts of relevant authorities and the support from the industry. 1 of 6 ladies and gentlemen, 3. the costs of the financial crisis are significant. according to the financial stability board ( fsb ), the cumulative loss of output since the crisis, compared to its pre - crisis trend, is estimated around 25 % of one year ’ s world gdp. 4. to address the fault lines that caused the financial crisis, the g20 leaders in 2008 agreed to initiate a comprehensive programme of regulatory reforms which covers 4 ( four ) core elements : 1. ) building resilient financial institutions ; 2. ) ending too - big - to - fail ; 3. ) making derivatives markets safer ; and 4. ) transforming shadow banking into resilient market - based finance. 5. as a member of the fsb and the basel committee on banking supervision ( bcbs ), indonesia endevours to implement the reforms in a full, timely and consistent manner albeit challenges due to differences in the characteristic of our financial market with that of advance economies, in which the regulation is build upon. ladies and gentlemen, 6.