This broad flexibility within our statutory legislation (which came into force in 2004) proved to be a huge advantage during the crisis, also by comparison with other central banks. For instance, we were quickly in a position to issue our own debt certificates and develop a large market for them. We do not use these SNB Bills because we need money. They are used to absorb excess liquidity in the money market. Second, our independence is not unconditional. With the privilege and duty of independent action comes a particular responsibility. And whoever bears responsibility in our democratic constitutional state must be accountable for his or her actions, for the means chosen and the results achieved.6 Consequently, under article 7 of the National Bank Act, we maintain a regular exchange of information with the Federal Council, and the SNB and the Federal Council inform one another of decisions that will have a significant economic or monetary impact. This is important for us, because it ensures that we are familiar with the fiscal political framework within which we conduct our monetary policy. Nevertheless, each body retains full  4  Cf. also Message on the revision of the National Bank Act of 26 June 2002, FF 2002 6107 to 6109. 5  Together with the possibility of re-election, this helps to set the incentives for members of the Governing Board in a way that ensures that long-term fulfilment of the statutory mandate is also in their individual interest.
On the other hand, we can take risk onto our balance sheet should we regard this as absolutely necessary in order to fulfil our mandate. In this respect, the lesson learned from the crisis is that, in good times, we need to ensure that our balance sheet is as robust as possible, so that we can burden it in bad times. Finally, in terms of staff, our independence is expressed by the fact that the members of the SNB executive bodies – the Governing Board members and their deputies – are appointed by the Federal Council for a fixed and comparatively long term of six years.5 Ladies and Gentlemen, our independence is not unlimited, however. First, it is not absolute but related only to our mandate. It is not we ourselves but the Swiss legislators who charge us with maintaining price stability. Incidentally, that also applies to mandates other than the monetary policy core mandate, which I will not be talking about today. The SNB has specified its monetary policy mandate and rendered it measurable. A situation of price stability prevails when the consumer price index (which is calculated by the Swiss Federal Office of Statistics, and not by us) shows an average annual rate of below 2%. Deflation is also regarded as a failure to attain the objective of price stability. Where we are independent is in our choice of the means by which we fulfil this mandate. Under article 9 of the National Bank Act, we may use a great many instruments, as needed.