It is thus not a permanent instrument for boosting capital, but rather a temporary requirement to be employed in exceptional circumstances. The countercyclical buffer is an important element in the macroprudential toolkit. I would therefore now like to take a brief look at the progress made in the area of macroprudential policy in Switzerland from the SNB’s perspective. Progress in structuring the macroprudential policy framework At its news conference one year ago, the SNB drew attention to the absence of an adequate set of instruments in the area of macroprudential policy. This was in response to a request by the Parliament’s Control Committees to evaluate our mandate and set of instruments relating to financial stability. So what are the key milestones that have been achieved this year in establishing a framework for macroprudential oversight in Switzerland, in relation both to instruments and to the division of responsibilities? Firstly, with regard to the above-mentioned countercyclical buffer, the financial stability task force led by the FDF has taken concrete steps towards implementing an important  2  BIS central bankers’ speeches  macroprudential instrument. In addition, the proposed structure of this buffer provides for a clear division of responsibilities: After consulting with FINMA, the SNB submits a request to the Federal Council regarding the activation and the level of the buffer. The Federal Council then makes the final decision. Secondly, in the context of the implementation of the “too big to fail” regulations, the decision-making authority with regard to systemic importance was clearly defined.
The European banking sector is particularly affected, as investors fear losses from write-downs on government bonds. The ensuing loss of confidence in the banking system is resulting once again in a sharp fall in activity on the interbank market, which in turn is leading to higher refinancing costs and liquidity bottlenecks. Meanwhile, the European banks themselves are holding back economic activity with their restrictive lending practices. Weak economic activity is further hampering efforts by the affected nations to restructure their budgets. All of these developments have caused a steep rise in credit risk premia in financial markets. In response to this serious situation, euro area countries have adopted additional measures to strengthen fiscal discipline in a sustainable way and to restore confidence in the European banking sector and the financial markets. The actual implementation of these measures is essential if the financial markets are to be convinced in the long term. On the whole, we expect that the international environment will probably remain fraught with considerable uncertainty for some time to come; the risks to financial stability will remain correspondingly high. Situation of Swiss big banks The deterioration in the global economic environment has not left the Swiss big banks unscathed. In the second half of 2011, their profitability suffered from the volatile financial market situation as well as from low customer activity levels. Against this backdrop and given the enhanced regulatory requirements, UBS and Credit Suisse have announced that they will be significantly reducing their risk exposure for the next few years.