Unusual though they may be, ladies and gentlemen, negative interest rates are nonetheless necessary in the current situation if we are to fulfil our mandate against the backdrop of low interest rates worldwide. At the same time, low interest rates do give rise to certain challenges. Negative interest therefore also attracts criticism. That said, we are convinced that the benefits clearly hold sway. Our assessment centres on the fact that we take an overall view, and seek to serve the interests of the country as a whole. From the perspective of savers and pension funds, the present situation with low interest income is, of course, difficult. You might think that the SNB could simply remedy this. But let us assume that we were to raise the SNB policy rate to zero in the current situation. The economy would cool down dramatically, inflation would fall well into negative territory, and unemployment would rise. In such an environment, there would be scarcely any increase in longer-term interest rates. Furthermore, we would probably soon have to lower our policy rate again given the economic slowdown and lower inflation. Hence any gains in income for savers and pension funds would not be sustainable. From the banks’ perspective, negative interest rate payments to the SNB are a cost factor. We are aware of the burden this represents. That is why in September we adjusted our calculation of the exemption thresholds in such a way that the payments made by the banking system have nearly halved.
We do not burden the banking system any more than is necessary for us to be able to steer short-term money market rates. Ladies and gentlemen, we monitor the impact of negative interest precisely, and we take the side-effects seriously. However, we remain convinced that the benefits it brings Switzerland as a whole clearly outweigh the costs. The negative interest rate and the willingness to intervene are currently the best instruments for ensuring appropriate monetary conditions and thus securing price stability and supporting the economy. Page 4/6  Berne, 12 December 2019 Thomas Jordan  News conference  Monetary policy outlook  Allow me to summarise the key messages with regard to our monetary policy. We anticipate that our economy has expanded by around 1% this year. We are expecting growth of between 1.5% and 2% next year. Inflation expectations are within the range consistent with price stability. The conditional inflation forecast for the coming quarters is slightly lower than in September, but it is essentially unchanged in the longer term. The Swiss franc remains highly valued, and the situation on the foreign exchange market is still fragile. Against this backdrop, our expansionary monetary policy remains appropriate. Monetary policy and climate change  This brings me now to the significance of climate change for the SNB. When it comes to this key issue, we are focused first and foremost on being able to properly assess the possible consequences for the functioning of economies and financial systems, both in Switzerland and worldwide.