| Andréa M. Maechler and Thomas Moser | © Swiss National Bank  SNB has adjusted its approach to implementing monetary policy  Objective  Approach   Keep secured short-term CHF money market rates close to SNB policy rate   Reserve tiering  Reserve absorption  Environment  Large stock of reserves  SARON is the new CHF reference rate 5  17.11.2022 Return to positive interest rates: Why reserve tiering? | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Reserve tiering determines remuneration of reserves …  Banks with reserves exceeding their thresholds Threshold Reserves up to threshold  Reserves above threshold  Remunerated at policy rate (0.5%)  Remunerated at policy rate minus a discount (0%)  Banks with reserves falling short of their thresholds Threshold Reserves  Remunerated at policy rate (0.5%)  6  17.11.2022 Return to positive interest rates: Why reserve tiering? | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  … and creates an incentive for banks to trade reserves  Banks with reserves exceeding their thresholds Threshold Reserves lent to other banks  Reserves up to threshold  Remunerated at policy rate (0.5%)  Remaining reserves above threshold (0%)  Banks with reserves falling short of their thresholds Threshold  Interbank trade  Reserves borrowed Remunerated at policy rate (0.5%) from other banks Reserves  7  17.11.2022 Return to positive interest rates: Why reserve tiering?
In addition, sufficient digital infrastructure should be put in place as it will considerably strengthen other modes of connectivity. The internet and mobile communication connectivity will radically change the ways in which businesses operate and people interact, as they drive productivity and efficiency of all sectors. It will also facilitate financial, transport and logistics services, as well as open door to knowledge sharing for people across the subregion. While digital technology is rapidly improving in some GMS countries, there remains large “digital divide” both within and between countries that should be narrowed. BIS central bankers’ speeches  1  The second aspect is trade and investment connectivity. Intra-regional trade and investment activities have continued to flourish, mainly thanks to complementarities among GMS economies. Many GMS countries have varied and abundant natural resources, young population and low labor costs, while the others can offer technological know-how and financing. With varying industry specializations, the diversity among GMS members has contributed to stronger regional supply chain network, and in the future should magnify national strengths towards a higher competiveness of the whole subregion. Amid thriving trade and investment, Thailand is well-positioned to serve the whole subregion, owing to our established legal framework, financing facility, infrastructure, logistics and IT capability. This can be seen by prospering business activities along the Thai border with other GMS countries. Last year, Thailand’s 25 border customs checkpoints with Myanmar, Laos and Cambodia registered impressive trade flows of more than 500 billion baht.