Chart 2: National Bureau of Statistics, China Chart 3: Associação Nacional dos Fabricantes de Veículos Automotores, Brazil Chart 4: Ministry of Economy, Trade and Industry, Japan Chart 5: Bundesbank, Germany Chart 6: Bureau of Labor Statistics, US Chart 7: ONS Chart 8: Baltic Exchange Chart 9: Consensus Economics and Bank calculations  BIS Review 8/2009  1  Governments and central banks around the world responded decisively and boldly with large fiscal injections and cuts in interest rates, and the provision of hundreds of billions of pounds in capital and funding to support banks. The scale and urgency of their actions embodied an audacity born out of pessimism. Tonight I want to ask: what went wrong? How can we limit the impact of the banking crisis on the wider economy? And can we design a better approach to the management of our economy and financial system in the future? So what went wrong? The origins of the crisis lie in the imbalances in the world economy which built up over a decade or more. The entry of the rapidly growing economies in Asia into the world trading and financial systems provided a huge new pool of savings. But their development and exchange rate strategies meant that they were running large current account surpluses. In other words, their domestic saving was more than enough to finance investment at home. Significant amounts were channelled into foreign financial assets.
The relevant legislation contains a number of mechanisms designed to ensure the SNB’s independence. One of these is our distribution practice, which has been developed on the basis of the provisions of the National Bank Act (NBA). We are happy to make distributions to the Confederation and the cantons; we can only do so, however, where the balance sheet and annual results allow for this. As we announced some days ago, this will unfortunately not be the case for the 2013 business year – the first time since we began our profit distributions in the current form, over 20 years ago. Thus the provisions regarding profit distribution clearly set out in the NBA have come into effect. This ruling takes automatic account of the fact that the risks in our balance sheet have increased as a result of combating the crisis. According to the legislative authority, a strong SNB balance sheet is more important than distributions to shareholders or to the Confederation and the cantons. It therefore supports the SNB in its conduct of an independent monetary policy, something which is particularly valuable in difficult times. Nevertheless, I am conscious that the lack of a distribution can be very distressing for the Confederation and the cantons, in particular, and will be a challenge. However, distributions will not be assured in the future either, since our results will continue to be subject to considerable fluctuations.