It is simply a case of adapting the implementation of this strategy to an environment characterised by interest rates close to zero and a Swiss franc once again in the role of a safe haven. Contrary to certain reactions aired in the media, the action to counter the rise of the Swiss franc against the euro is not a form of competitive devaluation, which would inevitably work against the interests of our country in the long run. Rather, it is a key operational tool which, under the given circumstances, helps us perform our mandate with regard to price stability, in other words to preserve our economy from both inflation and deflation. The outlook for 2009 The year 2009 will see the steepest decline in Switzerland’s GDP since 1975. Exports, normally the driving force of our economy, will continue to be weak, and the lack of confidence in the corporate sector will weigh on investment demand. Moreover, all signs point to a further slackening of consumption in view of growing uncertainty about households’ purchasing power. All in all, the outlook for the near future is anything but bright. Switzerland does not constitute a special case – all industrialised countries are faced with a similar downturn, especially those with high exposure to foreign trade.
Jean-Pierre Roth: Review of the Swiss economy in 2008 and the outlook for 2009 Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the General Meeting of Shareholders of the Swiss National Bank, Berne, 17 April 2009. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests The financial crisis, which first emerged in August 2007, continued to spread during 2008. From mid-September on, the situation deteriorated sharply. Growing uncertainty about the stability of the financial system gradually paralysed the money market. Most industrialised countries implemented relief packages for banks with the aim of improving their refinancing conditions, cleaning up their balance sheets or strengthening their capital base. In fact, the crisis led to an unprecedented level of government intervention. Far-reaching guarantees were granted, major corporations were put under state control, and a substantial amount of risk was transferred from the private to the public sector. The difficulty of implementing our monetary policy The waning ability of the financial markets to function properly posed problems for the implementation of our monetary policy. The prevalent mood of uncertainty created a strong appetite for liquidity, and yet the seizing-up of the interbank market hampered the supply in Swiss francs. In view of these two factors, the Swiss National Bank (SNB) had to resort to some exceptional measures. From the start, the uncertainty engendered by the financial crisis led to a surge in demand for liquidity by both banks and the public in Switzerland.