thomas jordan : currency reserve adjustments, the sic payments system and financial market developments introductory remarks by mr thomas jordan, member of the governing board of the swiss national bank, at the half - yearly media news conference, berne, 14 june 2007. * * * in my remarks, i would like to address three topics. first, i will speak about the adjustments in the composition of our currency reserves. then, i would like to comment on the swiss interbank clearing ( sic ) payment system and its twenty years of existence. at the end, i will say a few words about developments in the financial markets. 1. adjustments in the composition of currency reserves the swiss national bank is adjusting the composition of its currency reserves. before the end of september 2009 it will sell 250 tonnes of gold and increase its foreign exchange reserves by a corresponding amount. the overall level of currency reserves will remain unchanged. the gold sales fall within the bounds set by the second gold agreement of 8 march 2004, in which the central banks of the eurosystem, plus the sveriges riksbank and the swiss national bank, agreed to limit their gold sales over a period of five years, beginning on 28 september 2004. the gold agreement specifies that annual sales by all signatories may not exceed 500 tonnes and that the total sales volume over this period shall not amount to more than 2, 500 tonnes. for the gold sales it was planning, the snb was allocated a quota not claimed by other central banks that were party to the agreement of 2004. the snb has chosen an approach for its gold sales that will avoid market unrest, with regular sales transactions. the swiss national bank holds currency reserves in the form of foreign currency and gold, thereby ensuring that it has room for manoeuvre in its monetary policy at all times. as a result of the sharp rise in the price of gold, the proportion of the currency reserves held as gold has increased by about a quarter since mid 2005, from 33 % to the current level of 42 %. the purpose of the snb's gold sales is to rebalance the composition of currency reserves with respect to its monetary policy requirements. moreover, by reducing its gold reserves and increasing its foreign exchange reserves, the overall risk on snb assets will decline. once the sales have been completed, the swiss national bank's gold holdings will amount to some 1, 040 tonnes. 2. swiss interbank clearing ( sic ) to celebrate its 20th anniversary over the next

, where the degree of resource utilisation is more than satisfactory, demand should stabilise. for 2010 as a whole, the snb expects real gdp growth of between 0. 5 % and 1 %, following a decline of around 1. 5 % in 2009. changes in monetary and financial conditions overall, monetary conditions are a reflection of our expansionary policy, especially with respect to interest rates and the monetary aggregates. the libor is currently at the level targeted since march this year, i. e. 25 basis points, a level which can be regarded as a floor. the fact that it was impossible to bring the rate down any lower than this led us, in march, to introduce other instruments in order to make our monetary policy as expansionary as the circumstances demanded. monetary conditions have become more expansionary via the interest rate channel in particular. indeed, credit premia on the capital markets have declined steadily since the beginning of the year. as yields on confederation bonds have remained low, other long - term yields have also trended downwards. it has thus become cheaper for companies to raise funds by borrowing on the capital market. in addition, our figures show that financing in the form of bank loans has also become more attractive following the decline in the libor. in real terms – i. e. after factoring in expected inflation – interest rates are even lower. the swiss franc has appreciated slightly in trade - weighted terms, as a result of the recent weakening of the dollar. however, it has remained stable against the euro, which shows that the monetary policy followed since march has been effective. an appreciation of the swiss franc against the euro would run counter to the relaxation in monetary conditions brought about through the interest rate channel. this is why the snb will continue to act decisively to prevent any excessive appreciation of the swiss franc against the euro. an assessment of monetary conditions can be misleading if it is based on prices, which, like currently the libor, have reached a bound. for this reason, an assessment based on quantities – money and credit – is particularly important in the current circumstances. the monetary base has increased substantially since october 2008, when the financial crisis entered a new phase following the collapse of lehman brothers. we supplied the interbank market with sufficient liquidity to meet burgeoning demand in a climate of uncertainty, in order to prevent any increase in money market rates. since then, precautionary base money demand has declined and we have