high swiss franc, the minimum exchange rate is still the key monetary policy instrument for the snb. our monetary policy decisions have caused the snb balance sheet to increase considerably. due to the size of the balance sheet and the uncertainty on the capital markets, annual results are expected to be volatile in the foreseeable future. that is why we cannot provide you with any forecasts of the snb ’ s future annual results. we are certainly very aware that the lack of a dividend is painful for many shareholders. however, as you know, the snb is obliged by constitution and statute to act in accordance with the interests of the country as a whole. its primary goal is to ensure price stability, while taking due account of the development of the economy. the snb is required to gear its overall, illiquid assets totalling usd 38. 7 billion were taken over. the funding was as follows : the snb granted a loan of usd 25. 8 billion and ubs provided 10 % or usd 3. 9 billion in the form of the purchase price for the option to repurchase the stabilisation fund at a later date. the difference between the funds paid into the stabilisation fund and the total sum of transferred assets was made up of contingent liabilities which, at that point, did not require any financing. in 2009, the confederation sold the equities arising out of the conversion of these notes to institutional investors, thereby ceasing its involvement. bis central bankers ’ speeches monetary policy to this goal alone, and not to making profits. i would therefore like to thank you, our shareholders, also on behalf of my colleagues, jean - pierre danthine and fritz zurbrugg, for your loyal support of and understanding for the activities of the snb. the governing board thanks the snb staff for their untiring service to our institution. thank you all for your attention. bis central bankers ’ speeches

monetary policy easing measures, the single currency came under downward pressure. by the beginning of december, the expectations of financial market participants had not been fulfilled and the euro gained in value again. by comparison with its mid - year level, the euro has appreciated only marginally on a trade - weighted basis. demand for secure investments remained high worldwide. on the bond markets, yields on longer - term government bonds declined further. chart 1 shows that the decline in yields in the euro area was somewhat greater than in the us. the yields on ten - year german government bonds have fallen by almost 20 basis points since the end of june. in france and italy, the decline in yields was more pronounced. meanwhile, yields on ten - year us treasury bonds have changed relatively little. on the swiss capital market, almost the entire yield curve has shifted downwards again since mid - year. yields on confederation bonds with terms of up to 13 years are currently in negative territory. this corresponds to three - quarters of the outstanding volume. at the beginning of december, the yield on ten - year confederation bonds reached a new low of – 0. 4 %. most recently, it was trading at – 0. 25 % or about 40 basis points lower than mid - year. bis central bankers ’ speeches how negative interest works in the second part of my remarks today, i will talk about the way in which negative interest works. since january, the swiss national bank ( snb ) has been charging negative interest of – 0. 75 % on sight deposits held by banks and other financial market participants at the snb. negative interest is a key instrument in our monetary policy. together with our willingness to intervene on the foreign exchange market, it counteracts the overvaluation of the swiss franc. when calculating negative interest, the snb grants the banks exemptions so that the banking system does not have to carry the full burden resulting from the high level of sight deposits. for banks subject to minimum reserve requirements, the exemption threshold is calculated as 20 times the minimum reserve requirement, based on a reference period. for sight deposit account holders not subject to any minimum reserve requirements, the exemption threshold has been set at a minimum of chf 10 million. by applying negative interest universally to all account holders, we are adhering to the principle of equal treatment. it therefore makes sense that banks with above - average sight deposits in proportion to their minimum reserves pay higher interest than other banks. in this respect, negative interest is no different to