Cf. SNB Quarterly Bulletin 3/2016, p. 26. For a detailed description of methodology and calculation of this item, cf. Altermatt, Lukas and Baeriswyl, Romain (2015), ‘The effect of the monetary base expansion on the balance sheet of domestic banks’, SNB Quarterly Bulletin 1/2015, pp. 34–45. Another possibility is that there have been significant changes in transactions with banks abroad. Cf. Auer, Raphael A. (2015), ‘A safe haven: International demand for Swiss francs during the euro area debt crisis’, SNB Quarterly Bulletin 2/2015, pp. 40–52. Seite 6/7  transactions. Thus, as can be seen in chart 9, the pension funds’ foreign currency exposure after hedging has declined steadily, while the share of their assets in foreign currencies has simultaneously risen to almost 50%. In retrospect, full hedging of currency risk has turned out to be advantageous, due to the significant appreciation of the Swiss franc and the comparatively low interest rate differential with other countries. At present, we are proceeding on the assumption that the economic outlook for the global economy will continue to firm. In the US, policy rates have been rising for some time and markets expect further tightening. This means that interest rate differentials between Switzerland and other countries may widen further in the future. Given such a scenario, it is to be expected that domestic investors will once again hold more foreign currency assets, and that they will hedge these less in future. Concluding remarks Ladies and gentlemen, this brings me to the end of my speech.
What is clear in those early editions is the decidedly international flavour of a London investor’s interests – from tramways in Buenos Aires to copper mines in Portugal. Since then, London has been a truly international financial centre. In 1913, at the twilight of the last great wave of globalisation, 71 foreign banks had London offices. A century later, there are nearly four times as many. Today, almost twice as much international banking activity is booked here as anywhere else. London is the home of global markets as well as global banks. Almost half of all turnover in over-the-counter (OTC) derivatives takes place here. London’s share of global foreign exchange turnover is almost as high and it remains a major hub for trading in gold. UK insurance companies have around 10% of the global market.2 Extending the net further, the UK is home to the third largest “shadow banking system” with assets of $ trillion.3 The emergence of London as a financial centre in the nineteenth century owed a lot to the UK’s position as the world’s greatest trading nation. Britain accounted for as much as a quarter of world trade and produced around a tenth of global GDP.4 Over the following  1  At around this time there were 701 accountancy firms operating in the City, and over 2000 firms of solicitors. See David Kynaston’s book “City of London: The History” (Chatto & Windus, London, 2011). 2  See “Fund Management September 2013” published by TheCityUK, available at http://www.thecityuk.com/research/ourwork/reports-list/fund-management-2013/.