The chart shows the net investment result since the first quarter of 2010 for the foreign exchange reserves, as well as for the individual components. The dominant role of exchange rate movements is clearly evident. In the past, too, exchange rate movements have posed by far the greatest risk to our portfolio. Taking a long-term view, exchange rates have been responsible for about 80% of the total risk on the foreign currency reserves. Reform of interest rate benchmarks Following last year’s revelations that Libor interest rates had been manipulated, various activities to reform the Libor and other interest rate benchmarks are under way. The SNB is involved in these reform activities at both international and national level. The objective is to improve the credibility and acceptance of the existing interest rate benchmarks or, where appropriate, to take steps to ensure the provision of robust alternative interest rate benchmarks. International efforts are being coordinated by the Financial Stability Board on behalf of the G20 countries. They involve not only central banks and supervisory authorities but also an international group of private sector financial market participants. They are examining, first, the extent to which the existing Libor interest rates fulfil the requirements laid down by securities supervisors last July (the IOSCO standards). Second, they are investigating whether there are alternative interest rate benchmarks which would better meet the needs of the market and the requirements of supervisory authorities in the longer term.
This is probably due, not least, to progress in overcoming the crisis as well as encouraging economic data from the euro area. However, investors are still cautious, so that demand is still high for investments seen as safe havens. Consequently, in recent months, the Swiss franc has moved in a narrow range above the minimum exchange rate of CHF 1.20. Nevertheless, in view of the progress in the euro area, many market participants expect that the Swiss franc will depreciate. Despite this progress, it is still too early for an all-clear. Conditions on financial markets could change again rapidly. In order to counteract possible tensions on financial markets and lessen their potential impact on the economy, six leading central banks including the Swiss  BIS central bankers’ speeches  1  National Bank (SNB) converted their reciprocal swap lines into a standing arrangement in October. These swap lines had initially been arranged on a temporary basis at the height of the financial crisis, in order to secure access to liquidity. Developments in foreign exchange reserves At the end of September 2013, our holdings of foreign exchange reserves stood at CHF 443 billion. I would now like to make a few comments on income from foreign exchange reserves. I should begin by stressing that monetary policy has priority over investment policy, and that generating income is not the primary objective of investment policy. We are guided, first of all, by the criteria of security and liquidity.