In fact, the disconnection between the physical receipt of funds and the location of the financial institution may have a great impact on disintermediation among recipients. Assuming that receivers can exercise some control over the mode and location of receipt, the geographic proximity of a branch or the ability to pick up a remittance in an  2  BIS Review 16/2006  office (as required by Western Union) can determine an institution’s ability to compete in the remittance market of the Albania, not to mention the possibility of mobilizing savings from these new potential clients. Remittances can be a point entry for many remitters and their families to the formal financial system. Many emigrant families are either not familiarized with banks or have limited access with financial institutions. The Bank of Albania through its public communication strategy is aiming to bring the public closer to banking products and services, including transfers. No matter the small size of remittance amounts. Even those small shares left by recipient families in bank accounts could assist economic development as more funds will be available in banks to provide loan products to private sector. The same concern was initially expressed about public administration salaries. Now, this service is provided by the banking system, and we see the power of pooling small amounts.
The anticipated strengthening in the global recovery will have a supportive effect. Negative interest rates I would now like to turn to negative interest rates. Following the interest rate reductions since the last monetary policy assessment, the reference interest rate is now negative for the first time in the history of the SNB. This situation is new, and has therefore been discussed in detail in the public arena. I would like to emphasise that lowering the interest on sight deposits at the SNB into negative territory is a necessary monetary policy measure. Negative interest makes holding investments in Swiss francs less attractive for Swiss and foreign investors. This creates incentives to reduce inflows to the franc, and reinvest Switzerland’s traditional current account surplus abroad. Negative interest thus contributes to a weakening of the Swiss franc. The interest rate reductions had a rapid effect. As expected, the negative interest rate imposed on banks by the SNB was transmitted to the entire spectrum of money and capital market interest rates. However, low or negative interest rates are not limited to Switzerland. Low interest rates are a global phenomenon and some other countries, especially in the euro area, also have negative rates. Switzerland cannot disassociate itself from such developments. With the interest rate reduction in Switzerland, the interest rate differential to the major currency areas, which had declined to virtually zero in recent years, has now increased again.