notably in the markets for over - the - counter ( otc ) derivatives and in short - term funding markets. the federal reserve, together with other regulators and the private sector, is engaged in a broad effort to strengthen the financial infrastructure. for example, since september 2005, the federal reserve bank of new york has been leading a major joint initiative by both the public and private sectors to improve arrangements for clearing and settling credit default swaps and other otc derivatives. the federal reserve and other authorities also are focusing on enhancing the resilience of the markets for tri - party repurchase agreements, in which the primary dealers and other large banks and broker - dealers obtain very large amounts of secured financing from money funds and other short - term, risk - averse investors. in these efforts, we aim not only to make the financial system better able to withstand future shocks but also to mitigate moral hazard and the problem of " too big to fail, " by reducing the range of circumstances in which systemic stability concerns might prompt government intervention. more generally, the stability of the broader financial system requires key payment and settlement systems to operate smoothly under stress and to effectively manage counterparty risk. currently, the federal reserve relies on a patchwork of authorities, largely derived from under the memorandum of understanding, the sec and the fed will freely share information and analyses pertaining to the financial conditions of primary dealers. the two agencies have also agreed to work jointly with the firms to support their continued efforts to strengthen their balance sheets, their liquidity, and their riskmanagement practices. see : board of governors of the federal reserve system and securities and exchange commission ( 2008 ), " federal reserve and sec issue memorandum of understanding to deepen information sharing and cooperation ", press release, july 7. bank - affiliated primary dealers are already subject to mandatory consolidated supervision, but the focus of that supervision has been on limiting risks to the banks and other insured depository institutions within the holding company. existing provisions may need to be modified to provide regulatory authority to assess and limit risks to all functionally regulated entities, including securities subsidiaries. our role as a banking supervisor, as well as on moral suasion to help ensure that the various payment and settlement systems have the necessary procedures and controls in place to manage the risks they face. by contrast, many major central banks around the world have an explicit statutory basis for their oversight of payment and settlement systems. because robust payment and settlement systems are vital for financial stability, the congress

philipp hildebrand : thoughts on asset management in switzerland summary of a speech by mr philipp hildebrand, member of the governing board of the swiss national bank, at the swiss funds association, berne, 28 march 2006. the complete speech can be found in german on the swiss national banka€™s website ( www. snb. ch ) * * * summary asset management is an important source of earnings for banks in switzerland. the financial industry, in turn, is the largest sector in the swiss economy and of crucial importance for economic development. assuming that the world economy stays on its expansionary course, global assets will continue to grow strongly. moreover, the rapid increase in the volume of accessible information means that clients are often better informed. it is also giving rise to a broader product range and generating tougher competition and cost pressure amongst providers. these trends will bring about far - reaching changes in asset management over the medium term. money market, equity and bond investments managed on a moderately active basis often fail to pay the consistently above - average yield that would warrant their costs. they will probably lose ground to passively managed, inexpensive products. substantially better performance will be essential for the traditional products that remain. alternative investments, too, will benefit from the structural changes. however, this area will continue to be affected by the limited supply of exceptional portfolio management expertise. asset management in switzerland compares fairly well on an international scale in terms of performance and operational efficiency. however, the industry must lose no time in tackling the restructuring that is needed, particularly in the traditional segments. in the area of alternative products, switzerland has admittedly been successful in the fund of funds business. it is to be hoped that its financial industry will build on this success and become even more of a centre of excellence for alternative investments too.