In the UK a significant proportion of variable compensation now must be deferred for a period of seven years. This ensures that it can be clawed back over the time scales it generally takes for conduct issues to come to light. To address the “rolling bad apples” problem, mechanisms are now in place in the UK to ensure that when 6  individuals move on their history will be known to those who consider hiring them. The FSB is now considering whether to adopt such an approach more broadly. 7  5  The UK’s Fair and Effective Markets Review (FEMR) recommended that the EU’s market abuse regulation should be extended to cover every major fixed income and currency market, that criminal sanctions be updated, and maximum prison terms extended. See: http://www.bankofengland.co.uk/markets/Pages/fmreview.aspx 6 The PRA has introduced requirements for regulated firms to provide employment references to one another in a mandatory template when hiring Senior Managers. This includes information on an individual’s conduct record, and their fitness and propriety. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  This is all constructive but insufficient. That’s why we have emphasised measures to ensure firms and their employees take responsibility – individually and collectively – for their own conduct. These range from securing compliance with minimum standards to a common and dynamic understanding of good practice that is widely understood and collectively enforced.
It thus became fully clear  BIS Review 73/1999  2  that Switzerland was going to demonetise gold and to progressively transform a part of its stock into interest bearing assets. But why did we decide to fund the Foundation with gold and not with other assets? In order to understand this, one must take a closer look at the structure of the SNB’s balance sheet. 2. From revaluation of the gold stock to gold sales 2.1. The SNB’s balance sheet If, in relative terms, Switzerland is leading among all industrialised countries as far as gold holdings are concerned, the Swiss National Bank is also a special case with respect to the structure of its balance sheet. The bulk of the SNB’s assets consist of foreign exchange and gold. Swiss franc denominated assets constitute a mere 20% of the total. Compared to the balance sheets of the Bundesbank prior to the introduction of the euro, the SNB’s balance sheet exhibits only a small proportion of domestic assets (see graph 3). Graph 3 Assets Structure of the Bundesbank and the Swiss National Bank 20% 54% 50%  30% 30% 14% BUBA  Gold  SNB  Foreign Claims  Domestic Claims  Other Assets  On the liabilities side, the most striking feature are the bank’s own capital and reserves to which will be added the revaluation gain on the gold stock (see graph 4).