At the same time, politicians and the authorities have the task of creating the business conditions which will support the banks in fulfilling these prerequisites. With the business conditions in mind, I will comment today on four factors which I regard as essential: First, relevant and effective regulations; second, maintenance of Switzerland’s economic and political stability; third, protection of the privacy of honest tax-paying bank customers; fourth, ensuring access to foreign markets. I would like to begin, however, by talking about the economic importance of the banking industry for Switzerland, as well as the fundamental challenges faced by this industry at present. Economic importance of the banking centre in Switzerland The banking system is often described as the life blood of the economy. With good reason. General economic prosperity and the development of the banking industry are closely related. When intermediation between capital supply and demand works well, a significant contribution is made to the prosperity of a country.1 It works the other way round, too. The banking centre benefits from a prospering economy, because the demand for financial services from companies and private households increases, not least in the area of management and investment of assets. Switzerland is a prime example of the positive interdependency between financial developments, on the one hand, and overall economic prosperity, on the other.
Responding to a question by Investor.bg, BNB says that given the lev’s fixed exchange rate, delaying the entry into ERM II cannot create direct financial and macroeconomic risks for the Bulgarian economy. Could the opposite happen, however? Is it possible for ERM II membership to be negative for Bulgaria if it comes during unfavourable times for the European economy? To put it in different words, should we be in a hurry for the eurozone or should this goal be consistent with the conditions and trends for the time being? We should follow our strategic plan with a focus on the quality of the process. Due to the nature of our monetary regime, based on a fixed exchange rate, as well as our firm commitment to not change it until country’s eurozone accession, our currency being part of ERM II will not lead to any changes in our macroeconomic position. The direct effects will be rather positive, such as increasing Bulgaria’s credit rating and improving the overall investment environment. Spanish economist Daniel Lacalle told Bloomberg TV Bulgaria in an interview that he believes the ECB’s policy of stimulation has long exhausted its efficiency and the only thing it is currently doing is to transfer funds from productive to non-productive sectors of the economy. Lacalle also recalls that negative interest rates have played a significant role in Japan’s difficulties with inflation and growth. What’s your opinion? Is there a risk for the eurozone to get into the Japanese scenario? The global economic environment is far from being conventional.