Philipp Hildebrand: Developments in the current financial crisis
Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of
the Swiss National Bank, at the Swiss Funds and Asset Management Forum, Berne, 2 April
2009.
The complete speech can be found in German on the Swiss National Bank's website (www.snb.ch).
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The financial market turbulence, which began some 20 months ago, has grown into the
largest and most complex crisis since the 1930s. The real world economy is now feeling the
full force of this financial crisis. We are currently experiencing a very difficult period, although
there are a few signs that the global economy could possibly be close to the cyclical trough.
However, the route to recovery is unlikely to be straightforward, and the downside risks to
growth remain considerable.
Throughout the world, governments and central banks have taken steps to stabilise the
financial system. In addition, a large number of countries are pursuing fiscal policies aimed at
stimulating demand. Central banks have lowered interest rates rapidly and sharply, and, in
some cases, taken exceptionally far-reaching measures to alleviate the economic downturn.
Cumulatively, these measures will ultimately help to ensure that the global economy returns
to a growth path.
The Swiss National Bank (SNB), too, has made decisive use of conventional monetary policy
tools and innovative, far-reaching monetary policy measures. We will deploy these measures
aggressively for as long as this remains appropriate, both within the context of our monetary
policy strategy and with a view to our inflation forecast.
We are aware that long-term risks are associated with the option we have chosen for fighting
this crisis. Yet the SNB is profoundly convinced that the risks associated with the option of
"doing too little", let alone the option of "doing nothing", would have been far greater. As soon
as a return of the Swiss economy to its long-term growth path can be foreseen, the SNB will
certainly not hesitate to redirect its monetary policy accordingly.