A priori, there is no right or wrong approach here, since the design and character of the macroprudential instruments chosen must take account of the special features of the banking system in the individual country in question. What approach has Switzerland chosen? In the area of financial stability, it has opted for an approach in which responsibilities are clearly allocated to existing institutions. The principle adopted in the case of the structures and tools is “as much as needed but as little as possible”. In my view, this regulation approach is well suited to our country. Concentrations of power are not in line with the culture of balance and limitation of powers which is fostered in our country – a culture which has served it well. Thus, contrary to the international trend, microprudential banking supervision here has not been transferred to the central bank, remaining the responsibility of the Swiss Financial Market Supervisory Authority, FINMA. A lean approach was also chosen for the macroprudential area, with the new responsibilities clearly divided between the two institutions. FINMA is responsible for measures of a more structural nature, such as the increased capital requirements which systemically important financial institutions are required to meet in order to alleviate the “too big to fail” issue. The aim of these instruments is to improve regulation of and incentives for individual institutions. Consequently, it makes sense that FINMA, which is experienced in supervising institutions, is responsible for this area. Conversely, the SNB takes on a key role when it comes to cyclical measures.
The fall in market interest rates has also played its part in narrowing the net interest margin, since the cost of liabilities, and especially of deposits, which are the main source of funding for Spanish banks, tends to be less sensitive to changes in market returns than the remuneration of assets. 9/29  Indeed, regarding assets, the remuneration of variable-rate loans, which make up most of the stock of outstanding credit in Spain, adjusts to the new market prices as the reference indices are updated (which generally occurs with a lag of less than one year). Further, interest rate falls also pass through to new lending, which likewise gives rise to a cut in the average remuneration of assets. Regarding liabilities, the zero level of interest rates has acted as a lower bound for the cost of deposits. The reason for this downward stickiness in the cost of deposits is that negative interest rates in these instruments could reduce the supply of funds, especially in the case of households, as they may prefer to hold cash, which has zero but not negative remuneration, rather than deposits. However, as regards other bank liabilities, such as debt securities, interest rate decreases pass through to their cost without the zero level acting as a lower bound. Indeed, the average cost of some financing instruments, such as covered bonds, fell to negative values in the summer. The impact on costs is particularly important against a background in which banks have to meet regulatory MREL requirements.