Swiss central bank board member explains unique situation

Swiss National Bank governing board member Jean-Pierre Danthine, examining its unusual monetary policy situation, said the impact of unconventional measures should not be overestimated.

Jean-Pierre Danthine, a member of the governing board of the Swiss National Bank (SNB), delivered a speech in which he discussed the central bank’s unique monetary policy situation.

Speaking at the 14th Journée Solutions Bancaires in Geneva, Danthine explained that in contrast to many countries, Switzerland still has the “leeway to undertake fiscal manoeuvres”, reducing the pressure on the central bank to take measures such as quantitative easing.

However, “increased uncertainty and extreme risk aversion” caused the Swiss franc to appreciate significantly in 2011. The movement of the currency created the risk of “severe deflationary developments”, Danthine said, and as a result, the central bank implemented measures to achieve a “substantial and sustained weakening of the Swiss franc”.

Danthine emphasised, however, that such unconventional measures are “tailored responses to exceptional circumstances” and their impact should not be overestimated.

Click here to read the speech.


This article was first published by Risk

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