Political and institutional framework A further prerequisite for Swiss financial service providers to compete on an international level is a sound political and institutional framework. Switzerland has long had stable political relations, legal certainty, efficient authorities, and a solid and secure infrastructure. This constitutes a strong underpinning for financial service providers. But let us not rest on our laurels. We must try to avoid creating any administrative hurdles that neither contribute to stability nor bring any great benefit, but instead unnecessarily restrict the activities of financial service providers. Transfer stamp tax and withholding tax, for instance, curb the potential for growth in Switzerland. The reform of the withholding tax system and the abolition of transfer stamp tax on domestic bonds are expected to strengthen the Swiss capital market. 2 This would not only benefit the financial sector, but also improve the financing options available to companies. It would also benefit small and medium-sized enterprises, for which such opportunities have been very limited until now. 2  Cf. Roadmap for financial market policy Switzerland 2020+, Advisory board for future of Swiss financial centre, 2019. Page 4/5  Open market access Switzerland undoubtedly owes much of the prosperity it enjoys today to open markets and thriving trade. However, for the export-oriented parts of the Swiss financial industry, limited market access continues to be an obstacle restricting growth potential. Market access to some countries has deteriorated since the financial crisis. This especially affects wealth managers who are operating in our relatively small domestic market.
We observe a downward trend of productivity growth – which is considered by some as “secular”, jumping perhaps too hastily to a very long-term conclusion. Furthermore, the ageing of the population means the labour supply is shrinking and potential growth is falling. Thanks to Japan’s G20 Presidency, the challenges posed by demographics are now on the agenda. The ECB’s monetary policy has played an important role in supporting the recovery of the euro area: estimates put the cumulated impact on growth at around 2.5 pp and on inflation at between 1 and 1.5 pp for the period 2014–181. In addition, 11 million jobs have been created since 2013. In September, the ECB introduced a further package of measures. Although it has received less attention, the most innovative part of this package is the strengthening of the state-dependent forward guidance on interest rates. Conditional on inflation developments, this will act as an automatic stabilizer through adjustments in the yield curve and financial conditions. In other words: what does matter is not only the level of our key short term interest rates, which are currently anticipated by markets, reasonably in my view, as close to bottoming out ; it is also and foremost the time horizon of our policy measures Clearly, monetary policy will be all the more effective if it will no longer be the only game in town. You may not realise it, but the euro area has more policy room than others in non-monetary domains, but under-uses it.