Christian Noyer: Possible ways of improving the process of rating Speech by Mr Christian Noyer, Governor of the Bank of France, at the Symposium on financial ratings, organised by the Cercle France-Amériques, Paris, 12 December 2007. *  *  *  Ladies and gentlemen, It is a great pleasure and honour for me to speak at this conference organised by the Cercle France-Amériques and close the rich and lively round table discussions and the previous speeches on rating agencies and the financial crisis. In the current state of turmoil, rating agencies have attracted a large amount of criticism. My intention is not to enter into this discussion, but rather to make a few remarks on the rating process itself and the possible ways of improving it, in the light of the recent events. Preliminary remarks An essential function of financial markets is to collect and process information. This information is used to assess the risk and return on the various assets, and therefore to help price discovery and more generally to take investment and financing decisions. However, the process by which this information is factored into prices is complex. Economic agents do not all have the same access to data and processing capacities. There is therefore an asymmetry of information on the markets, which is at the root of well known market failures: adverse selection (whereby lower quality investments are more readily financed than “good” projects) and moral hazard (which encourages investors to take excessive risks).
Thomas Jordan: Review of the Swiss economy and global economic outlook Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 December 2012. *  *  *  The Swiss National Bank (SNB) is leaving the minimum exchange rate of CHF 1.20 per euro unchanged. The Swiss franc is still high. An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy. Consequently, the SNB will continue to enforce the minimum exchange rate with the utmost determination. It is prepared to buy foreign currency in unlimited quantities for this purpose. In addition, the SNB is leaving the target range for the three-month Libor at 0.0–0.25%. If necessary, it stands ready to take further measures at any time. Essentially, the SNB’s conditional inflation forecast is unchanged from its September forecast. In the short term, price movements will again be subdued by a somewhat weaker economy in the euro area. In addition, the impact which past appreciation of the Swiss franc is having on the price level is rather stronger than had originally been expected. From mid-2013 onwards, the path of the new conditional inflation forecast is almost identical to that of September. The forecast is based on an unchanged three-month Libor of 0.0% over the next three years. Given this assumption, the Swiss franc weakens over the forecast period. Nevertheless, forecast inflation remains low for the next few years.