Listening to my presentation, you will no doubt have concluded that the process of demonetisation of gold is well under way and that one can reasonably expect that the gold parity of the Swiss franc will be abandoned in the spring of next year. Formally, the demonetisation of gold will give the SNB sufficient room for manoeuvre to become active on the market. Gold transactions could thus be scheduled to begin next year when the legal framework will be in place. Greater uncertainty surrounds the question of the allocation of excess reserves, but this will have no impact on our sales intentions. As no precise date for the beginning of our sales activities could be set, I will limit myself to indicate to you in what spirit we plan to approach this question. In my opinion, two observations seem essential: First, as a major holder of gold, the Swiss National Bank has no interest in adopting a strategy which would push the price down. We know that 1300 tonnes of gold cannot be absorbed by the market in a short period of time. We therefore are considering distributing the sales over a period of several years. Second, we intend to keep important gold holdings. Once the sales programme has come to an end, gold will continue to play an important role in our monetary reserves. The recent revision of the Constitution has led to the stipulation that we should maintain “sufficient” gold reserves.
The SNB will be allowed to evaluate its gold holdings at their market price, and a revaluation surplus will appear on our balance sheet. Technically, the SNB will also be able to buy or sell gold on the market. 3.2 Second stage: transfer of excess reserves The recently revised Constitution and the new Federal Law on Currency and Payment Instruments are not sufficient as a legal basis for allowing the National Bank to transfer excess reserves for external use. A special constitutional basis must be created for this purpose and then specific legislation will have to allow the realisation of concrete projects (law on the Swiss Foundation for Solidarity, for example). 5  BIS Review 73/1999  Consequently, a second revision of the constitutional article concerning the SNB is now being drafted. Among other things, this new article provides for the possibility to transfer, outside the SNB, excess reserves deriving from the revaluation of the gold stock. Deliberations on this article have just begun in Parliament. If everything goes well, the article could be approved by both houses before this summer. Afterwards, in compliance with Swiss regulations, the draft of the new article of the Constitution will be submitted to the voters and the cantons for approval. In Switzerland, every amendment to the Constitution must reach two majority votes: a majority of the citizens’ vote and a majority of the cantons approving the revision. This vote could take place in spring 2000, i.e.