taken by the major issuers to redenominate bonds in circulation from the national currency to euro at the beginning of january this year and to standardise the very different market practices in europe on internationally consistent market conventions resulted almost overnight in the emergence of a large and liquid euro - bond market. in this context, all the market participants were focusing their attention on the question of who would set the benchmark for the euro area. even in the run - up to monetary union, competition among public issuers had increased owing to the forthcoming abolition of the exchange - rate - induced yield differentials. the german federal government positioned itself at an early stage for the changed competitive situation and, in cooperation with the bundesbank, took a number of measures to enhance the attractiveness of its bonds. these measures included, in particular, concentrating the instruments on the five major maturity ranges ( six months, two, five, ten and 30 years ), increasing the volume of individual issues, concentrating the federal government ’ s and its special funds ’ borrowing on the uniform issuer ’ s name “ federal republic of germany ”, introducing the stripping option in order to capture the yield curve as completely as possible, and introducing a transparent and efficient issue method. further improvements are currently under discussion, for example, with respect to the five - year “ bobls ”, whose present dual role as paper for small private investors and for institutional investors is criticised by major market players. these measures have enabled germany to set the benchmark in the important ten - year maturity range. at the same time, the bund future has risen to become the most - traded futures contract in the world. incidentally, the market for “ jumbo pfandbrief bonds ” has also benefited from the benchmark role of the german federal bonds. this market seems to have good prospects of assuming the benchmark function within the euro - spread markets in terms of liquidity, credit standing and the stability of the spread over federal bonds. the equity markets cannot yet keep up with the europe - wide performance of the money and bond markets. the stock exchange environment in europe with its differing rules and regulations is still heavily fragmented. with more than 30 stock exchanges, europe has an enormously high density of such places. the associated fragmentation of liquidity is naturally not conducive to an efficient and transparent price formation process. different underlying legal and tax conditions as well as different accounting rules also hinder the process of growing together to form a single european

news conference berne, 13 december 2018 andrea m. maechler introductory remarks by andrea m. maechler i will begin with a review of developments on the financial markets and look at the status of the swiss franc. after that i will say a few words about the upcoming transition from libor to saron as the new reference interest rate in switzerland and inform you about progress being made on this front. situation on the financial markets so let me start with developments on the financial markets. in the second half of the year, sentiment on the financial markets darkened considerably at times, despite the fact that the economic situation in many countries remained sound. nonetheless, the economic data did weaken slightly in some regions. this caused investors to focus on a number of risks – most notably, ongoing concerns about protectionist tendencies, but also the currency crises unfolding in several emerging economies and italy ’ s budget dispute with the eu. as a result, volatility on the financial markets has increased significantly since mid - year ( cf. chart 1 ). this is particularly true of the equity markets, where prices fluctuated substantially at certain points. thanks to strong economic data and solid corporate earnings growth, us stock exchanges performed better than their counterparts in europe and the emerging markets ( cf. chart 2 ). despite suffering sizeable losses in october, the s & p 500 recently closed only moderately lower than it had at the end of june down 3 %. in europe, the stoxx 600 lost around 9 % over the same period. various factors contributed to the weak performance of european stocks. economic momentum has weakened of late and corporate earnings growth remained below expectations in the third quarter overall. moreover, currency turmoil in turkey and the budget dispute between italy and the eu weighed on europe ’ s stock exchanges. in switzerland, the smi has managed to gain around 1 % since mid - year. this page 1 / 5 berne, 13 december 2018 andrea m. maechler news conference above - average showing was predominantly due to a strong performance in july, which in turn was mainly driven by positive corporate news in the pharmaceutical sector. on the interest rate markets the picture initially remained mixed due to uneven growth momentum in the major economic regions since mid - 2018 ( cf. chart 3 ). in the us, the federal reserve confirmed that it intended to maintain its policy of gradual interest rate rises. against this backdrop, yields in the us continued to rise and the yield on 10 - year us treasuries