This is because, unlike the unsecured TOIS fixing, SARON, as the secured overnight reference rate, is risk-free. Although the volume of SARON swaps is still small, many players are in the final stages of preparing to enter this market. Both the transaction volumes and acceptance of this market among market participants are expected to increase in the coming weeks and months. The Swiss National Bank is supporting and assisting in continued efforts to establish SARON on the Swiss money market. Page 2/5  Berne, 15 June 2017 Andréa M. Maechler  News conference  New code of conduct for global foreign exchange market transactions  That brings me to the new global code of conduct for foreign exchange market transactions known as the FX Global Code. Published at the end of May, this new code aims to define clear rules of conduct for all those transacting business on the foreign exchange markets, with a view to enhancing efficiency. A well-functioning foreign exchange market is in the interests of all market players, not least the central banks. Various central banks, including the SNB, have therefore been working alongside private sector partners to draft the FX Global Code. The code of conduct affects all foreign exchange market activities – from communications with market participants to risk management and the execution of transactions. As a global set of rules, the new code replaces all existing codes of conduct for foreign exchange markets and, as such, establishes clear and uniform guidelines.
IT is also a necessary condition for the methods used to calculate financial risks in portfolios of securities or credits. The new Basel Committee rules on capital adequacy in banks, to take an example, are entirely dependent on such calculations. Network effects in the payment system The banking sector in Sweden is, as we know, strongly concentrated. This can raise questions in certain contexts as to how well competition functions. However, the concentration has also enabled, as I pointed out earlier, a more rapid exploitation of network effects and economies of scale connected with IT developments. Let me go into this in more depth, hopefully without becoming too abstract. The development of payment services is governed, just as on other markets, by supply and demand. Supply is affected by costs and technology, while demand is affected by factors such as price, acceptance, comfort and accessibility. Advantages of scale within the production of payment services arise as these services are often connected with high fixed costs and relatively low flexible costs. Building up a new computer system is expensive, but every transaction that passes through the system costs less. The economies of scale effects provide incentive for various types of co-operation and joint solutions, where producers join forces to utilise the economies of scale and spread costs over greater volumes. There are also advantages of scale on the demand side, the in the form of positive network effects. Positive network effects mean quite simply that a particular system becomes more usable the more people who use it.