First of all, by creating a direct relationship between our profits and the funding of an important element in our system of social security, the initiative would establish a dangerous link, since it would certainly place the SNB under constant pressure to distribute more profits in the future. Higher profit distribution would only be possible if we took bigger investment risks or if we reduced our monetary reserves. Markets would start to ask themselves whether the SNB's goal was to ensure the monetary stability of the country or to generate profits. As I pointed out before, there is a risk that constant debate on this topic could sap market perception of our independence. This would damage our credibility and hamper our monetary policy. At the end of the day, implementation of this initiative would undermine confidence in the Swiss franc. Second, the initiative assumes that our profit distribution can be held permanently at a level above CHF 1 billion a year. This is an illusion. The only possible outcome is bitter disappointment on the part of our fellow Swiss. All our calculations show that, as confirmed in the remarks made by the President of the Bank Council on the results for 2005, the SNB's medium-term profit distribution potential amounts to only CHF 1 billion a year. If we deduct the gains due to the spectacular increase in the price of gold and to exchange rate gains from the CHF 12 billion profit recorded for 2005, the distributable profit falls to CHF 2 billion.
Globalisation does not mean that ASEAN countries should allow themselves to be swamped by foreign companies. It is a legitimate ambition for countries to want to build up their own strong companies. But the companies need to be internationally competitive; it is not viable for them to depend on protected home markets. Companies which cannot hold their own domestically will find it very difficult to compete abroad. Furthermore, governments must understand what industries they have the best chance of building up, given the nature of the global marketplace. In many industries technology and economies of scale have led to a worldwide wave of mergers and consolidations. For example in banking and auto manufacturing the scale has become global, with a few large players dominating the worldwide market. In these industries, the most promising approach for small and medium countries is to seek investments from these major players, not to build up their own national champions to compete against the giants. This is what Thailand has done with the auto industry. Globalisation has its downside. The competition is intense, the environment is constantly and rapidly changing, restructuring and upgrading are endless tasks, and unpredictable disasters strike from time to time. All this brings disorientation, new insecurities, and a sense of loss of control. But governments have to manage these problems and risks.