The resulting lower real interest rates and easier financing conditions might well have exacerbated the accumulation of financial and real imbalances by supporting even bigger asset and credit bubbles and ultimately have led to a larger crisis as these bubbles burst. During the crisis, Monetary Union has also helped to contain cross-country heterogeneity in bank credit conditions and supported the availability of loans to the private sector. Not only have standard and non-standard monetary policy measures served to ease financial conditions on average, they have also helped to limit the dispersion of bank interest rates across countries. For example, the range of long-term rates on bank mortgage loans to households across euro area countries has been limited to around 1½ percentage points in recent years, which is similar to the dispersion seen at the end of 2006, before the crisis started. While the spreads between interest rates on bank loans to non-financial corporations in Greece and Portugal have increased by up to 2 percentage points over the euro area average, the equivalent spreads for Ireland and Spain have remained modest over the entire crisis period. 4  In 2009 and 2010, GDP growth equalled: –7.6% and –1.0%, respectively, in Ireland; –2.3% and –4.4% in Greece; and –2.6% and 0.8% in Portugal. These figures compare with GDP growth of –4.1% and 1.8% in the euro area as a whole.
2  BIS central bankers’ speeches  Subsequently, on 6 September 2011, we decided to introduce the minimum exchange rate as an exceptional and temporary measure. Through the minimum exchange rate, the massive overvaluation of the Swiss franc was partially corrected. In this way, the SNB countered the acute threat to the Swiss economy and the risk of a deflationary development. The minimum exchange rate served the Swiss economy well. It helped to see it through the turmoil of that period and bought some time so that the economy could adjust to the new conditions, at least to some extent. Production and employment recovered faster than in many other countries. Over the past two years, GDP has grown by approximately 2% on average. The Swiss economy is now better placed than it was in 2011. New parameters for the economy: assessment and outlook What is our current assessment of the economic outlook, given the changed situation? Before discontinuing the minimum exchange rate, the SNB was expecting growth of some 2% for this year as well. We now anticipate GDP growth of just under 1%. With the end of the minimum exchange rate, Switzerland faces more difficult times ahead. Overall, the Swiss franc is once again significantly overvalued. The sharp, and above all abrupt, appreciation of the Swiss franc represents a major challenge. Our economy has time and again demonstrated how adaptable and innovative it is, and it can certainly handle a gradual, longterm appreciation in the real exchange rate.