In the current exceptional circumstances, the imposition of a minimum exchange rate is a measure that has received strong support from economic and political actors in Switzerland and abroad. Both the IMF and the OECD recently confirmed that this was an appropriate response 3 to the risk of economic contraction and deflation in our country. 4 Given the perfect  3  OECD (2012). 4  IMF (2012). 4  BIS central bankers’ speeches  alignment of this exceptional monetary policy measure with the pursuit of the SNB’s price stability mandate, one would imagine that, in the future, the National Bank’s independent status will remain as strongly anchored as in the past. Finally, it is important to consider the risks associated with the SNB’s inflated balance sheet. Our balance sheet has become more volatile, principally because it has grown in size − it is four to five times larger than it was in 2007 – but also because of the volatility of the overall environment. In the course of the last two years, risks have manifested themselves both positively and negatively. In 2010, for example, the SNB experienced its biggest ever loss, but in 2011, it also experienced one of its largest gains. The much increased size of our balance sheet, the unavoidable exchange rate risks associated with our foreign exchange reserves and a dependence on developments in the gold and capital markets, mean that the high volatility of the SNB’s annual results will be a standard feature of the near future.
Specifically, asset purchases are sometimes seen as “quasi fiscal policies” both on the asset side (due to the potential risks attached) and the liability side (when they contribute significantly to meeting the funding needs of the sovereigns). BIS central bankers’ speeches  1  At the time they were decided, those exceptional interventions were absolutely necessary. Although it had been forgotten, central banks were initially created to protect the economy from excessive financial disturbances. This was, historically, their “raison d’être”. As ultimate and unique providers of liquidity, they cannot escape this responsibility and let the financial system and the economy collapse. At the same time, by doing so, central banks have exposed themselves to a number of risks First, there are risks linked to balance sheet expansion. They cannot be ignored, although all central banks have been extremely careful in valuing the assets purchased or taken as collateral. Second, they run the risk of blurring the lines between fiscal and monetary responsibilities. A dynamic use of their balance sheets by central banks has effects on the allocation and distribution of resources in the economy. They may favour or penalise some types of collateral or certain borrowers. If central banks take on additional responsibilities in the area of financial stability, they will have to do so in close cooperation with fiscal authorities, thus exposing themselves to possible interferences with monetary policy. The major risk, however, is the risk of confusion. A multiplicity of interventions could be interpreted as a relative dilution of objectives.