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

jean - pierre roth : “ a franc remains a franc ” – 100 years of national bank policy in support of monetary stability address by mr jean - pierre roth, chairman of the governing board of the swiss national bank and chairman of the board of directors of the bank for international settlements, at the official ceremony of the 100th anniversary of the swiss national bank, zurich, 22 june 2007. * * * honoured president of the swiss confederation honoured prime minister of the principality of liechtenstein honoured members of the federal parliament honoured representatives of the cantonal governments honoured governors of fellow central banks honoured guests almost to the day 100 years ago, the swiss national bank opened its doors at the head offices in berne and zurich and the branch offices in basel, geneva and st gallen. this marked the end of around 16 years of parliamentary work that had followed the acceptance, in 1891, of a constitutional article leading to the establishment of a central note - issuing institution for the whole of switzerland. this prolonged process can definitely be explained by the fact that our countrymen, at the end of the 19th century, did not see any urgent need for the establishment of a central bank. in fact, the political debates prior to 1907 mainly focused on questions relating to the organisation of the bank and the distribution of its profits ; the regulatory role that the new institution was to assume was hardly touched upon. the new national bank was expected to gradually take over the activities of the former noteissuing institutions and to bring some welcome order to the payment system. at the time, the value of the swiss franc was defined in gold and silver, the precious metal content of the coins was fixed accordingly and banknotes could be exchanged for gold. nowadays, the snb ’ s responsibility in matters of monetary stability is uncontested. in fact, it is explicitly mandated by law to preserve price stability while taking economic developments into account. moreover, economic theory stresses the special responsibility of central banks in this area. the goals, methods and instruments of monetary policy have thus undergone profound changes. nevertheless, the principles that have guided our activity over the past century have been remarkably enduring, and this is exemplified by the history of the national bank. pursuit of stability from the outset, the national bank recognised that its role as the national note - issuing institution would extend far beyond the harmonisation of payment systems. the first steps were difficult. during the first world war, the snb actively participated in financing military expenditures through its loans. this undisci