As the economic recovery took hold, the deflationary risks diminished, notwithstanding the appreciation of the Swiss franc. Over the past few years, my Governing Board colleagues and I have repeatedly emphasised that the SNB does not pursue an exchange rate target, but consistently bases its monetary policy on its legal mandate. This mandate stipulates that the Swiss National Bank is required to ensure price stability, while taking due account of economic developments. The dreaded scenario of a deflationary dynamic could thus be avoided so far. Nonetheless, the appreciation of the Swiss franc that ensued obviously impaired the price competitiveness of Swiss exporters. However, the exchange rate is only one factor to affect exports. This raises the question as to which other factors were potentially beneficial for the development of Swiss goods exports in the most recent crisis. 3 To answer this question, I would now like to take a closer look at the structure and developments of Swiss goods exports in the last 20 years. I will concentrate on three factors in particular, namely the geographical, the sectoral and the qualitative dimensions of the Swiss export industry. 2. Swiss exports: developments and an international comparison  2.1  The geographical dimension  Geographically speaking, Switzerland’s export structure has become increasingly diversified over the last two decades.
Even the watchmaking industry – which, as a producer of luxury goods, suffered a massive drop in demand during the crisis – has seen a strong recovery in the last year thanks to the global turnaround. Accordingly, exports of watches are now only slightly below their pre-crisis level. 3. Conclusion  In closing, let me recap. The geographical orientation, the focus on products less sensitive to the business cycle, and the specialisation in top quality goods are the three factors likely to have mitigated the negative impact of the most recent financial and economic crisis on Swiss exports. On the whole, the Swiss export industry seems to be well positioned to compete successfully on a global level. Such a conclusion is reassuring, because major challenges still lie ahead. 17  For example, Credit Suisse (2006): Quality – The Export Industry’s Only Chance? BIS Review 157/2010  7  For instance, Switzerland’s increased focus on the Asian market also has its risks. A significant slowdown in Asia’s economic recovery – particularly in China – would undoubtedly impair Swiss export prospects. Needless to say, however, a renewed downturn in Europe – still Switzerland’s most important trading partner by far – would impact Swiss exports to a far greater extent. Furthermore, current exchange rate developments pose a major challenge for Swiss exporters. Since the onset of the financial crisis, the Swiss franc has appreciated in real terms by around 15%.