While it is true that not all the components of Switzerland’s fiscal federalism can be transposed to the euro area, the concept at the heart of the Swiss model – striking a balance between control and liability – can, and should, offer us some guidance for reforms in the euro area.
In that environment it made sense to go slow and gradual in terms of balance sheet reduction. Fast forward to today. This is now the second time we have done balance sheet reduction and we learned from experience and can go faster than before. Policymakers and markets have a good understanding now of how the process works.