Another important element in our transition towards FIT is improving the skills, capabilities and capacities of our staff as well as the systems and procedures to establish a solid framework for forward-looking monetary policy conduct. A key step towards this advancement was when we partnered with the IMF, 4 years back, to develop a comprehensive, model-based Forecasting and Policy Analysis System (FPAS) to enhance the monetary policy decision making process. Substantial progress has been made in this regard, yielding a marked improvement in the modelling and forecasting capacity of the Central Bank, thereby enhancing the forward-looking monetary policy decision making process. The details of this modelling framework are in the public domain now. Going forward, the Central Bank will focus on devoting resources towards 15  further improving technical capacity and infrastructure, which would help generate timely and reliable model-based projections for macroeconomic analyses. The Central Bank has already planned to launch a number of new surveys and compile an array of new indicators to support monetary policy analysis. We continuously endeavour to improve the existing data collection and compilation efforts. These include several production trends related early warning indicators, upgraded price indices, extension of PMI surveys to sectors that need focused attention, and several digitalisation initiatives. We are also in the process of further expanding the household sector Inflation Expectations Survey (IES) beyond the Colombo District through the Country-Wide Data Collection System (CWDCS) with the intention of improving its coverage and precision.
In the opinion of the SFBC, urgent action was needed to prevent a dramatic worsening of the situation, with potentially very serious consequences for the stability of the entire banking system and for the Swiss economy as a whole. This was the environment in which we, in close collaboration with the SFBC and the Swiss government, prepared the operation that was announced on 16 October last year. It is not necessary here to reiterate the details of a transaction that was copiously commented on by the media and is described in our Annual Report. When planning this operation, we were fully aware of the financial risks inherent in the asset portfolio we were taking over. Yet we were convinced that these risks were adequately compensated for by the conditions under which UBS would participate in any losses and, above all, by the collective benefit derived from the stabilisation of Switzerland’s biggest bank. Our decision was thus based solely on considerations regarding the stability of the financial system. Only in a few years will it be possible to pass definitive judgment on our actions. If, upon completion, the operation proves successful, we might come to wonder whether the support measures were actually necessary. If, by contrast, losses are registered, our conclusion will be that the SNB’s operation helped prevent the worst.