And if they materialised to any very significant extent, the resulting tensions could be serious, because alternative mechanisms - such as labour migration or fiscal redistribution through a central budget - which help to mitigate sectoral or regional disparities in the national context - are less developed at the Eurozone level. Some commentators point to the present inflationary pressures in Ireland as an example of the problems that could arise where the single monetary policy is easier than the national situation might require - though I am not sure how far one can sensibly generalise from the Irish experience. It is equally possible to envisage circumstances in which the single monetary policy is too restrictive for some countries. The fact that the UK did not join in the first wave of EMU was a disappointment to some people, including to some of our European partners - but it was also a considerable relief to them - we would certainly have complicated the task of the ECB in setting its single monetary policy. And from our own perspective, if we had joined EMU from the start - and had Eurozone interest rates over the past eighteen months or so, it is very difficult to envisage how we would have avoided an inflationary boom in the UK. It is true that, to the extent that the present imbalance within our economy reflects sterling’s appreciation against the euro, we would have been protected against that.
The price of five-year futures contracts for West Texas Intermediate crude has almost doubled in the last three years. Following the sudden rise last spring, US capital market rates have since dropped back to the year-earlier level. The temporary increase in capital market rates in Europe was slightly less pronounced. As a result of the opposing movements of the US and European interest rates of the past few weeks, the long-term dollar interest rates now exceed the corresponding interest rates in the euro area by approximately 50 basis points. On the one hand, the general interest rate development in the capital markets reflects market participants’ misgivings concerning the strength of the economic upswing. On the other hand, the historically low nominal interest rates are testimony to the markets’ confidence in the ability and determination of central banks to further ensure price stability. Moreover, the interest rate structure in the US is characterised by the sizeable dollar investments from Asia. International equity markets trended sideways for much of the year, although some emerging market indices in particular were able to generate significant profits. 2. Managing the National Bank’s assets  The National Bank manages monetary reserves slightly in excess of CHF 60 billion, two-thirds of which are held in foreign currency investments and one-third in gold. In addition to this are approximately 25-30 billion Swiss franc assets in the form of balances from repo transactions in the  1/2  money market and bond investments in the domestic capital market.