News conference  15 December 2022, 10.00 am  Introductory remarks by Andréa M. Maechler In my remarks, I will talk in more detail about the implementation of today’s monetary policy decision, which Thomas Jordan has already touched on. I will start, however, by giving you an overview of how we have steered interest rates since the switch to a positive SNB policy rate in September. The switch from a negative to a positive SNB policy rate required us to make an adjustment to the implementation of our monetary policy in the money market. The new approach comprises two elements: reserve tiering – that is, tiered remuneration of the sight deposits that banks and other financial market participants hold at the SNB – and reserve absorption. This approach has proved successful. Following our monetary policy decision on 22 September, secured short-term Swiss franc money market rates moved quickly towards the new SNB policy rate (cf. chart 1). We are also continuing to see solid activity among participants in the money market, which ensures a robust basis for the calculation of SARON. From the outset, the market responded favourably to the deployment of our monetary policy instruments to absorb liquidity. On the very day of the monetary policy assessment in September, we started conducting repo transactions on a daily basis and issuing SNB bills on a weekly basis (cf. chart 2). In this way, we were able to reduce the liquidity supply in the money market sufficiently to allow us to steer interest rates effectively.
Let’s hope that trends that now appear to be leading us in the wrong direction can change course. Thank you for your attention. 1 Based on GDP at market rates. 2 Nordhaus, W. D. (2018): Speech delivered at the Nobel Banquet in Stockholm, 10 December 2018. 3 Blomgren, A. et al (2015) “Industribyggerne 2015” . IRIS Report 2015/031 (Norwegian only). 4 World Bank “Ease of doing business index”. data.worldbank.org/indicator/IC.BUS.EASE.XQ  6/6  BIS central bankers' speeches