Consequently, it makes sense, in principle, for central banks to take on macroprudential tasks as part of their contribution to financial stability. However, because the situation can vary depending on the individual country, there is no consensus about either the extent of these measures or the institutional responsibilities. Switzerland has limited its macroprudential arsenal to what is absolutely necessary and has clearly allocated responsibilities to the different authorities. In this respect, the relevant legislation has extended the SNB’s role in financial stability in some areas but not completely changed it. I am fully convinced that this cautious approach with clear allocation of responsibilities makes sense. We are doing everything we can to fulfil this extended role as best we can, in the interests of our country; in doing so we can draw on our wealth of experience in “traditional” financial stability. Concluding remarks Ladies and gentlemen, we have reached the end of our perusal of monetary policy and financial stability. I particularly wanted to show you which roles can and cannot be assumed by central banks and especially the SNB. As regards monetary policy, our role has not changed, even if the use and the extent of monetary policy instruments have taken on new dimensions since the beginning of the crisis. In the case of financial stability, our role was extended as a result of the experiences gained in the financial crisis, although the adjustments have been much less extensive than in some other countries.
As ever, my votes on Bank Rate at the December MPC meeting and beyond will be determined by pursuit of the inflation target, and guided by the evolution of the economic and financial data. Conducting central bank asset purchases But the MPC is not only taking decisions about Bank Rate. In parallel with increases in Bank Rate, the MPC has also embarked on quantitative tightening. Gilts held as a result of QE conducted over the past decade or more have been sold as of the beginning of this month, following the decision in February 2022 to cease reinvesting the proceeds of maturing bonds. QT is another aspect of the normalisation of the monetary policy stance. The MPC has committed to unwinding its QE holdings in a gradual and predictable manner. Gilt sales are running ‘in the background’, rather than being responsive to month-to-month data news. As I have already discussed, responses to shocks at the margin involve what the MPC has identified as its ‘active’ instrument – Bank Rate. From the outset of its communication about QT, the MPC has emphasised that, were markets to become dysfunctional, asset sales could, if necessary, be paused.