Niklaus Blattner: IT in the financial sector - aspects of regulation and supervision Summary of a speech by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at 8. Berner Tagung für Informationssicherheit (8th Conference on Information Security), Berne, 29 November 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The completeness, integrity, traceability and constant availability of data that has been securely processed are essential in order for the financial system to function smoothly. The Swiss Federal Banking Commission (SFBC) supervises banks and securities dealers domiciled in Switzerland. Its microprudential supervision focuses on the individual financial institution, in particular with regard to the protection of creditors and investors. By contrast, it is the task of the Swiss National Bank (SNB) to contribute to the stability of the financial system, i.e. it is engaged in macroprudential oversight. Banking legislation provisions governing the IT organisation requirements of a financial intermediary do not explicitly address the topic of information security, but rather focus on the notion of “proper and rightful conduct of business”. For the SFBC, information security is merely one concern among others. In one of its circulars it has, however, addressed several critical areas in greater detail, e.g. on the topic of external data management and outsourcing. The SNB’s mandate is limited to the payment and securities settlement systems.
So it was that, once the problems posed by the establishment of a banknote monopoly had been solved, the youthful SNB was quickly confronted, in 1914, with the problem of financing the military expenditure caused by the First World War and, after the end of hostilities, the difficulties related to normalisation. The social disruption of 1918 and the high level of inflation at the end of the war were bitterly felt and attributed to a failure of monetary management. This setback had a lasting effect on morale at the SNB and accounts to a considerable extent for the orthodoxy of the policies adopted in the decades that followed. This accounts for the determination with which the SNB worked to restore the rules of the gold standard once peace had returned. The pre-war gold parity was re-established in 1924. However, after a few good years, the economic situation again deteriorated, culminating eventually in the crisis of the 1930s. The devaluation of sterling in 1931, followed by that of the dollar in 1933, were the first episodes in the eventual collapse of the gold standard. In 1936, following the devaluation of the French franc, the Swiss federal authorities were forced, in their turn, to reduce the parity of the Swiss franc. A few years later, the challenge of administering a war economy again arose. The story of the Second World War, with its doubts, agonies and errors of judgement has been extensively analysed by historians over the past few years.