SNB focused on Crisis management

23 January 2009. St. Gallen (AWP) - At present, the policies of the Swiss National Bank (SNB) are clearly focused on crisis management. Indeed, the SNB has been facing great challenges for some time, a situation which is likely to continue in the foreseeable future. This is what Philipp M. Hildebrand, Vice-Chairman of the SNB’s Governing Board, said on Wednesday, 21 January, in his speech at the University of St.Gallen in the context of an Executive MBA HSG course.

Price stability, supply of liquidity, stimulation
However, he continued, the SNB was still enjoying an extensive capacity to act, with priority being accorded to price stability, the supply of liquidity to the economy, and if necessary its stimulation.

At the third stage of the crisis
At the moment, the economy was at the third stage of the current crisis, in which it would be decided whether
the governments’ and central banks’ monetary and fiscal stimulation packages would be sufficient to prevent, or at least partially curb, a renewed feedback loop from the strongly regressive overall economy to the financial economy, said Hildebrand according to his speech manuscript.

Situation has improved
Hildebrand explained that although the situation had improved in the last 18 months, it had still not returned to normal. It was a probability verging on certainty that the present debt relief process would therefore continue for some time to come.

He described the current crisis as the greatest and, above all, most complex financial crisis of the post-war era, which was now impacting on the real economy at full tilt. The money market was still suffering from a lack of confidence.