Link  to  the  speech:  3  prevent that some weak banks run into acute problems. In fact, some research results 3 based on OECD countries have indicated that the inflation rate is higher and more volatile in countries where the central bank has the sole responsibility for banking supervision. A failure in a supervised entity might affect the reputation of the NCB to the extent that its capability to perform effective monetary policy is hampered. In a crisis, there is a management problem in that the solution of a crisis in the supervised entities will preoccupy the minds of the NCB management so that it will not have the time to focus on other important issues. The Finnish approach is an attempt to solve this dilemma by having a separate board for the supervisory decisions but still being a part of the central bank for its funding and sharing of administrative resources. An overarching argument is that the Parliament should not delegate too much power to a non publicly elected body such as the central bank. But I do not see this as a major problem. The Parliament should set the parameters and limits for the powers of the NCB and the NCB will have to account for its conduct on a regular basis. If supervision is located in another authority, there will be similar issues of delegation and accountability. I noted earlier that the current trend is to move supervision out of the NCBs.
While nominal export turnover fell sharply, real export volumes held up much better. Hence, when the strong appreciation of the Swiss franc raised prices for foreign buyers of Swiss products, Swiss companies responded by cutting export prices, thereby preventing a sharp fall in real export volumes. Further evidence for this ‘margin compression’ comes from our own surveys, which SNB delegates for regional economic relations conduct regularly among Swiss companies. Global demand conditions have deteriorated somewhat in recent months. Emerging market economies in particular – but also some commodity-producing countries – have seen economic momentum fade. By contrast, major advanced economies continue to recover, albeit at a modest pace. On balance, we expect the global economy to grow moderately in the coming years. This should help to partially offset the drag from the overvalued Swiss franc. Thus, following a contraction in the first quarter of 2015, economic activity in Switzerland expanded again in the second quarter. In our estimation, GDP is likely to grow by close to 1% this year. Price stability is not in doubt In the last part of my speech, I would like to present our inflation outlook. Last year, the inflation rate – as measured by the consumer price index – averaged around zero. This year, inflation has fallen well into negative territory.