That was potentially a very important supportive step as a good proportion of businesses in the UK had floating rate loans which were linked to the LIBOR rate. GDP stabilised by the end of 2009, and grew at close to trend rates in the first half of 2010. The prospect of deflation, which had been a hot topic during early 2009, now seems much less likely. Indeed, press commentary through 2010 has instead mostly been focused on the elevated rate of CPI inflation (which reflects the temporary impact of a series of short-term price level shocks). 7 Why we did it the way we did Although QE was an “unconventional” monetary policy operation, it was not totally without international precedent, having been tried most notably in recent times by Japan. The Japanese programme is generally considered to have been a mixed success at best. Such a judgement is perhaps unfair but there were a number of lessons to be learned from their  3  For further discussion, see Cross, Fisher and Weeken, (2010), “The Bank’s Balance Sheet During the Crisis”, Quarterly Bulletin, 50, 1, pages 34–42. 4  See Benford, Berry, Nikolov and Young (2009). “Quantitative Easing”, Quarterly Bulletin, 49, 2, pages 90–100. 5  Joyce, Lasaosa, Stevens and Tong (2010). “The Financial Market Impact of Quantitative Easing”, Bank of England Working paper number 393. 6  London Inter-Bank Offer Rate – see http://www.bbalibor.com. 7  For more discussion see Fisher (2010), “Why is CPI inflation so high”. Speech to the Merseyside Young Professionals, June.
Consequently, Switzerland must do everything it can to secure its competitive position in this changing world – now and in the future. Third, convincing answers will be needed to counter the international pressure on Switzerland, which has increased considerably of late, particularly in connection with the question of the tax compliance of foreign assets in Switzerland. These are formidable challenges. However, Switzerland is well equipped to meet them with confidence. What is essential is that we are able to benefit from the strengths that characterise the country now as in the past. These success factors include (a) a social and political culture that builds on inclusiveness and the ability to reach a consensus, (b) innovative ability and flexibility, and (c) political and economic stability. BIS central bankers’ speeches  1