The financial crisis has shown that balanced economic developments require more than just price stability; financial stability is also of key importance. The SNB’s annual Financial Stability Report is a contribution towards this. In the report, we draw attention to developments which might present a risk for financial stability. In this respect, we are still concerned about imbalances on the mortgage and real estate markets. The financial crisis showed what serious effects the problems in the financial sector can have on the overall economy. It is precisely in the current environment of globally low interest rates that the danger of imbalances on the financial markets is particularly high. With our report, we would like to urge participants in these markets to exercise caution. In addition, recent developments in the area of legal risks demonstrate once again the importance of strongly capitalised Swiss banks. My colleague, Jean-Pierre Danthine, will now present the most important conclusions from our Financial Stability Report. Ladies and gentlemen, thank you for your attention. It is now my pleasure to give the floor to Jean-Pierre Danthine. BIS central bankers’ speeches  3
These attributes are complemented by a competitive tax regime. In the 2008 Forbes Tax Misery and Reform Index, Malta was classified as the fifth most tax-friendly country worldwide for companies and the most attractive in the EU. In addition, Malta has an extensive network of almost fifty double taxation treaties, and income earned overseas may be exempted from double taxation even when no bilateral treaty exists. Malta’s development as an international financial centre is reflected in the range of financial services available. Complementing the traditional retail functions, banks are increasingly offering private and investment banking, project finance, treasury services and syndicated loans. Malta also hosts a number of institutions specializing in trade-related products such as structured trade finance, factoring and forfeiting. At the end of last year, the number of banks stood at 22, up from 17 in 2004. The assets of the banking system, including both the domestically and the internationally-oriented banks, totalled € billion at the end of 2008, an increase of 10.5% over 2007 and nearly double the total in 2004. Other areas, too, have experienced rapid growth. These include fund management and collective investment schemes, captive insurance, asset management, back office  2  BIS Review 65/2009  processing facilities and call centres. Following the recent legislation on professional investment funds, considerable interest has also been shown by the hedge fund industry.