It is true that the signalling has been discussed in several speeches by Executive Board members. But as the idea behind these hearings is that I shall give an account of what has happened since the last time I was here, it seems appropriate to take up this issue again. Earlier the Riksbank applied something that I have on a couple of occasions described as “signalling by degrees”. Between the monetary policy meetings the individual Executive Board members sometimes held speeches where we more or less explicitly indicated how we thought the interest rate should be set at the next meeting. The idea was that sufficient  2  BIS Review 132/2007  information on how the Executive Board reasoned should have come out by degrees to prevent economic agents being taken by surprise when the interest rate decision was made. But since we began publishing our own interest rate forecast the need for this type of signalling between the monetary policy meetings has declined. Now that we will also be publishing our interest rate forecasts every second month, the need has declined further. The general public and the financial markets will now receive at fairly regular intervals a detailed description of how a majority of the Executive Board members consider that the repo rate should be set in the future. This is one of several reasons why we have stopped signalling in speeches prior to coming interest rate decisions, unless there are special circumstances.
Thomas Jordan: Monetary policy and the business cycle Summary of a speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 75th anniversary celebrations of the KOF Swiss Economic Institute, Zurich, 23 September 2013. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Monetary policy contributes to the prosperity of an economy by ensuring price stability in the medium and long term. This makes it possible to put resources to more efficient use, from an economic point of view, and also promotes investment and, with it, long-term growth. Price stability also helps to avoid undesirable distribution effects. Households with lower incomes derive particular benefit from this. Monetary policy can be used to dampen cyclical fluctuations. However, it is not suitable for short-term fine-tuning of the economy. From the point of view of the business cycle, the goal of monetary policy must rather be the reduction of larger risks and the alleviation of extreme situations. An example of one such measure is the minimum exchange rate, which the Swiss National Bank (SNB) set on 6 September 2011 to halt the Swiss franc's upward trend, thus averting a deflationary spiral and warding off the danger of a serious economic crisis. Monetary policy decisions are always subject to uncertainty. It is therefore of key importance that the SNB has a sound decision-making basis.