Let me now turn to the other side of the coin. Despite the above examples of areas where good prospects may arise for market activity, there are also elements of uncertainty on the horizon, and one of them is Brexit. Brexit On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union. This means that 30 March 2019 is, in principle, the “withdrawal date”. So far, in the draft Withdrawal Agreement, there is no specific regime with regard to financial services and this unquestionably generates a context of uncertainty that affects all market participants. Allow me to focus on how it affects banks. “Wait and see” is not an option. Banks need to prepare. Within the framework of the Single Supervisory Mechanism (SSM), the ECB, together with National Competent Authorities, is trying to communicate, to banks which may be considering relocating their banking activities to the euro area, the SSM’s supervisory expectations on different aspects such as: authorisations and licences to carry out banking activities in the euro area; internal governance and staffing arrangements; or authorisations and use of internal models. These expectations have a key underlying principle, which is the need to guarantee consistency across the existing and the relocating institutions, so that they both operate under the same regulatory, prudential and supervisory standards. There is another key aspect, which is the need to ensure that relocating banks are not empty shells.
However, the situation remains challenging for large sections of the economy – even at the current exchange rate, the Swiss franc is still very strong. We expect it to weaken over time, and fall back to a level more in line with its economic fundamentals. As the data show, economic activity in Switzerland slowed significantly in Q3 2011. Exports, in particular, fell noticeably. In addition to the strong Swiss franc, the general global economic outlook has deteriorated and downside risks prevail. Given this difficult environment, we remain firmly committed to defending the minimum exchange rate of CHF 1.20 per euro. This commitment applies at any time, from the moment the market opens in Sydney on Monday to when it closes in New York on Friday. We will not tolerate any trading below the minimum rate in the relevant interbank market. To enforce this policy, we are prepared to buy foreign currency in unlimited quantities if necessary. Moreover, we stand ready to take further measures if the economic outlook and the risk of deflation so require. To explain the rationale behind the SNB’s current monetary policy in more detail, let me briefly outline our assessment of the global economic situation, as well as the risks for the Swiss economy. Subdued global economic outlook and substantial downside risks In our global baseline scenario, the outlook remains – overall – subdued. Economic growth will continue to be driven by emerging markets.