A related characteristic is that apart from defining, and applying, constructively, the rules of the game, the various authorities do then leave the market to get on with it - they do not by and large seek to tell the various markets, or firms operating within them, what they should or should not do. In the Bank, for example, we always stand ready to help when market participants collectively seek our help - say, in relation to market infrastructure projects where, working with market participants, we took on the development and introduction of new settlements systems for the Gilt-Edged, Money and Equity markets and new wholesale payments systems - but we try to avoid either dirigisme or unnecessary conservative resistance to market initiatives, whether collective initiatives, such as the creation of LIFFE, or initiatives at the level of the individual firm. We may act as a catalyst, encouraging different sectors of the market to address emerging problems, either on their own or by coming together, but essentially we take the view that the markets and firms themselves are best placed to find the way ahead. The third characteristic of what I’ve called the free market ethos - and one which is absolutely crucial to the City’s success - is impartiality and even-handedness, both in the application of the rules of the game and in terms of business opportunities - applying the same standards to all market participants or would-be participants, regardless in particular of nationality. Some people still find this difficult to understand.
Last but not least, if Switzerland were to give up its monetary independence by pegging the franc to the euro or by joining the euro area, it would lose its privileged status and, consequently, Swiss interest rates would increase to European levels. Since higher interest rates mean lower asset prices and lower levels of investment, and also higher mortgage rates, the Swiss are understandably not keen on giving up their national currency. Since any major decision in Switzerland has to be approved in a public referendum, the prospect of EU and euro membership in the near future is thus highly unlikely. Given our exposure to global economic and financial shocks, and their arguably smaller importance for the euro area, pegging the Swiss franc to the euro is not a realistic option. Flexible exchange rates give us the room for manoeuvre we need. •  What has our experience been of coexistence with the euro so far? Very positive. Rather than crowding out independent currencies, the euro has stabilised the monetary scene in Europe. In fact, the franc is less volatile today than it was before European monetary integration. The price of the euro in Swiss francs these days is about 3% lower than it was in 1999, in other words, almost unchanged. We did have periods, however, when the franc was under pressure, especially after September 11 and before the outbreak of the war in Iraq. The safe-haven function of the franc then triggered a 10% appreciation in our currency against the euro.