Due to the changed international environment, however, which we are unable to influence, we have no choice but to adjust to a leaner period, whether we like it or not. Monetary policy of the SNB With the end of the minimum exchange rate, the SNB has now returned to interest rate management. However, this does not mean that we have reverted to business as usual for monetary policy. In December last year, the SNB introduced an interest rate of –0.25%, to be charged on sight deposit account balances held by banks and other financial market participants at the SNB. On 15 January – concurrently with the discontinuation of the minimum exchange rate – we lowered this interest rate again, to –0.75%. This lowering of the interest rate makes it substantially more expensive to hold Swiss francs compared to  BIS central bankers’ speeches  3  other currencies. Over time it is intended to cushion the impact of the discontinuation of the minimum exchange rate and counter a tightening of monetary conditions. Discontinuing the minimum exchange rate does not mean that the SNB will stop paying attention to foreign exchange market developments. We will continue to take account of the exchange rate situation in formulating our monetary policy in future. Following the discontinuation of the minimum exchange rate, the Swiss franc initially appreciated sharply against all currencies. The appreciation diminished somewhat in the following weeks.
Only one merger has taken place so far, between DBS and POSBank. But I know that all the banks are alive to the competitive trends, and are continually reassessing their position. It is a dynamic situation, and the present configuration is unlikely to be permanent. Regulatory cooperation and harmonisation The second dimension of financial integration is the trend towards greater regulatory cooperation and harmonisation. Starting in the 1980's, a series of international fora were created for regulators and policymakers to share experiences, cooperate with one another, and harmonise regulations and  2  BIS Review 45/2001  policies. Among the multilateral initiatives, the efforts of the Basle Committee and IOSCO are probably the best known. The Basle Capital Accord of 1988 helped to increase the capital held by internationally active banks, and to create a more level playing field for banks under different regulators. The new Basle standards now being finalised will remedy the weaknesses of the 1988 Accord, and enable banks to set aside capital in accordance with the riskiness of their assets. IOSCO has provided securities regulators globally with a useful platform to exchange views and enhance cooperation on issues relating to the regulation of the securities markets. It has developed a common set of objectives and principles of securities regulation, which enhance mutual understanding among securities regulators and commissioners. IOSCO has also been actively involved in promulgating standards of public disclosure, and facilitated cross-border capital raising and listings. The Asian crisis has added impetus to the harmonisation of regulatory standards.