(2015), “Understanding the role of debt in the financial system”, Bank for International Settlements, Working Paper No 479, January. 3 See Committee on the Global Financial System (2017), “Repo market functioning”, CGFS Papers, No 59; and  International Capital Market Association (2015), “Perspectives from the eye of the storm: The current state and future evolution of the European repo market”. 4 See e.g. Altavilla, C., G. Carboni and R. Motto (2015), “Asset purchase programmes and financial markets:  lessons from the euro area”, ECB Working Paper No 1864; Andrade, P., J. Breckenfelder, F. De Fiore, P. Karadi and O. Tristani (2016), “The ECB's asset purchase programme: an early assessment”, ECB Working Paper No 1956; and Blattner, T.S. and M. Joyce (2016), “Net debt supply shocks in the euro area and the implications for QE”, ECB Working Paper No 1957. 5 For a theoretical disposition, see Duffie, D. (1996), “Special Repo Rates”, Journal of Finance, Vol. 51(2), pp. 493-526. 6 See e.g. International Capital Market Association (2017), “European Repo Market Survey”, No 33, October. 7 Securities purchased under the PSPP have been made available for securities lending in a decentralised  manner by Eurosystem central banks since 2 April 2015. As of 8 December 2016, Eurosystem central banks have the possibility to also accept cash as collateral in their PSPP securities lending facilities without having to reinvest it in a cash-neutral manner. The aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity.
Our monetary policy, which is currently geared towards this challenging set of circumstances, consists of two key elements: the negative interest rate and the SNB’s willingness to take an active role in the foreign exchange market. Both of these elements are intended to make Swiss franc investments less attractive, thereby supporting economic activity. Swiss sovereign money initiative (Vollgeldinitiative) In conclusion, let me say a few words about the recently submitted sovereign money initiative. This popular initiative aims to fundamentally remodel Switzerland’s monetary policy and banking system. The initiative aims to remove the banks’ money creation powers. Instead, all new money would be created by the SNB and distributed directly to the Confederation or the citizens. Under the new system, proponents want any income that the SNB derives from note-issuance to be distributed to the public. Moreover, they claim that such a system would enhance financial stability. The sovereign money initiative would entail a radical overhaul of Switzerland’s financial system, creating a regime that does not exist in any other country today. The introduction of sovereign money would be a risky experiment. We must therefore carefully analyse the impact of the proposed constitutional change on the structure and implementation of monetary policy. Equally, we must take a comprehensive look at its implications for financial stability, the exchange rate and the economic cycle. We will comment further on the sovereign money initiative in due course. Ladies and gentlemen, thank you for your attention.