BIS central bankers’ speeches  7  Exercising care and caution in uncharted macroprudential waters The authorities are sailing in uncharted waters when it comes to macroprudential measures. The complex interrelationships between monetary policy, traditional banking supervision and the macroprudential toolkit are difficult to assess. Consequently, we do not always know exactly how the different measures will work. The need for analysis and research in this field is correspondingly great. However, to be realistic, we will never have all the answers or be able to dispel all uncertainties, as – incidentally – is always the case in monetary policy. But this should not stop us using these instruments when we judge it to be necessary. In doing so, we endeavour to exercise the requisite care and caution. Consequently, we undertake comprehensive investigations, evaluate the results carefully and systematically, and carry out our measures based on criteria which have been specified in advance. As in the case of monetary policy, if decision-making is as free as possible from political influence and manipulation attempts, its quality will be improved. Following these thoughts, I would like to return to my initial question concerning the SNB’s role in financial stability, as a kind of interim conclusion. Central banks have always had an important role in financial stability. However, the crisis has shown that the traditional approach, which relies exclusively on the power of persuasion and the extinguishing of fires, can be very expensive.
By international standards, the Governing Board is a very small decisionmaking body made up of just three people. Also, it traditionally reaches its decisions by a process of consensus. If the minutes of its meetings were to be published, discussions within the body would probably become less candid and open and – ultimately – the quality of decision-making would suffer as a result. Moreover, it is unlikely that publishing the minutes would in fact lead to better public understanding of monetary policy within Switzerland. That is why, in view of these special Swiss features, we have decided not to release the minutes of our meetings. BIS central bankers’ speeches  3  An additional way of increasing the transparency of monetary policy, and thus its effectiveness, could be the provision of information on the future path of reference interest rates. “Forward guidance” of this kind may be useful for many central banks. However, there are pitfalls and this could easily lead to confusion in the market, especially if the guidance is attached to too many conditions. However, I would not want you to misunderstand me. It is absolutely right that central banks should explain to the general public how monetary policy would react to certain developments. This is nothing new. In the case of the SNB, for instance, the conditional inflation forecast – our main interest rate indicator and an important element in our communications – already provides certain information about the future path of interest rates.