With supranational monetary policy concerned primarily with the overall price stability objective, symmetric (global) shocks transmitted through financial linkages and domestic (national) divergent cycles, the burden of adjustment has to be borne by national macroprudential policy. The absence of other adjustments mechanisms, such as a perfect labour mobility or a transfer mechanism in the form of unemployment insurance 17, adds to the burden on fiscal policy, which is already suffering from moral hazard issues. The Vice-President of the ECB, Vitor Constancio, is right to emphasize that “macroprudential policy is therefore essential in any economy as the business and financial cycles are not synchronised. Even more so in a monetary union where vulnerabilities identified in each country can be addressed with macroprudential policy, allowing for the appropriate heterogeneity, while countries remain subject to a single monetary policy” 18. 13  Ray, H. (2013): Dilemma Not Trilemma: The Global Financial Cycle And Monetary Policy Independence, Working Paper 21162, NBER Working Paper Series. 14  Couré, B. (2015): Paradigm lost: Rethinking international adjustments, speech atEgon and Joan von Kashnitz Lecture, Clausen Center for International Business and Policy, Berkeley, 21 November 2015. 15  Beck, H., Prinz, A. (2012): The trilemma of a Monetary Union: Another Impossible Trinity, Leibniz Information Centre for Economics. 16  Pisani-Ferry, J. (2012): The Euro Crisis and the New Impossible Trinity. 17  Bernoth, K., Engler, P. (2013): A Transfer Mechanism as a Stabilization Tool in the EMU, DIW Economic Bulletin, 1.2013. 18  Constâncio, V. ibid.
Philipp Hildebrand: The Swiss National Bank and the financial crisis Summary of a speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the Club of Rome Forum, Zurich, 20 January 2011. The complete speech can be found in German on the Swiss National Bank’s website. *  *  *  Since August 2007, central banks have been continually at work, fighting the crisis. They have had to stabilise the financial system and limit the extent of the economic downturn. In many countries, the repercussions of the financial crisis are reflected in both government finances and central bank balance sheets. In Switzerland, these repercussions – i.e. the costs of the financial crisis – have had relatively little impact on the budgets of either the Confederation or the cantons. The costs are mainly to be found in the SNB’s balance sheet, at the moment largely in the form of risks. The SNB balance sheet has significantly lengthened, particularly as a result of foreign currency purchases. Inevitably, the large holdings of currency investments means greater risk. As the SNB announced on 14 January 2011, it is expecting a substantial loss for the year 2010. This is mainly attributable to exchange rate losses on foreign currency investments. In view of these losses, it is very tempting to argue that the SNB should not have purchased any foreign exchange. However, the purpose of the SNB is not to make a profit.