. interest rates on the capital market have also fallen. in june, yields on 10 - year swiss confederation bonds fell to a record level. the low capital market interest rates reflect a higher demand for swiss government bonds. in addition, long - term inflation expectations continue to be firmly anchored. private companies are also benefiting from low interest rates on capital markets. credit risk premia have fallen further and rates of interest on bank loans are also at a very low level. since the last monetary policy assessment, the swiss franc has appreciated against the euro. it has simultaneously depreciated against the us dollar. as a result, the trade - weighted external value of the swiss franc has only slightly increased. the expansionary monetary policy is also reflected in the monetary aggregates. thus, the monetary base rose to a record chf 128. 6 billion in may, and growth of the monetary aggregates is continuing at a high level. for example, m2 was growing at 10. 2 % in may and m3 at 7. 1 %. credit growth also increased further. after slowing to 2. 7 % in september 2009, the rate of growth increased to 4. 1 % in april. this acceleration is attributable to loans not secured by mortgages, which have been growing since april. mortgage loans grew at a rate of over 5 % in april. there are still no signs of any credit crunch in the survey on bank lending conditions conducted regularly by the snb. the survey even provides initial indications of a possible trend reversal. during the financial crisis, a number of banks had reported a slight tightening in their loan conditions. however, in the first quarter of 2010, a few banks ( for the first time ) reported an easing. we continue to observe a considerable increase in loan volumes for residential mortgages. this increase, along with movements in real estate prices, represents a risk that demands the full attention of the snb. my colleague, thomas jordan, will discuss this topic in greater depth. development of the snb ’ s balance sheet as a consequence of monetary policy in my following remarks, let me focus on the extraordinary development of the snb ’ s balance sheet. as is the case at other central banks, the balance sheet has undergone a considerable expansion and change in its composition since the beginning of the financial crisis. by may 2010, it had nearly tripled in size to over chf 300 billion. this extraordinary development in the balance sheet is a direct consequence of monetary

news conference berne, 13 december 2018 thomas jordan introductory remarks by thomas jordan ladies and gentlemen it is a pleasure for me to welcome you to the swiss national bank ’ s news conference. i will begin by explaining our monetary policy decision and our assessment of the economic situation. i will then hand over to fritz zurbrugg, who will speak about developments in the area of financial stability. after that, andrea maechler will review the situation on the financial markets and will update you on the progress towards replacing libor. finally, we will – as ever – be pleased to take your questions. monetary policy decision let me begin with our monetary policy decision and the inflation forecast. we are maintaining our expansionary monetary policy, thereby stabilising price developments and supporting economic activity. interest on sight deposits held by banks at the snb is to remain at – 0. 75 % and the target range for the three - month libor is also unchanged at between −1. 25 % and – 0. 25 %. we will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. since the monetary policy assessment of september 2018, the swiss franc has depreciated slightly on a trade - weighted basis. this development is primarily due to the strengthening of the us dollar. the franc is virtually unchanged against the euro. overall, the swiss franc is still highly valued, and the situation on the foreign exchange market continues to be fragile. the negative interest rate and our willingness to intervene in the foreign exchange market as necessary remain essential. in so doing, we are keeping the attractiveness of swiss franc investments low and reducing upward pressure on our currency. page 1 / 4 berne, 13 december 2018 thomas jordan news conference the new conditional inflation forecast for the coming quarters is lower than it was in september. this is mainly due to the drop in oil prices. the medium - term inflation forecast is also slightly lower owing to more moderate growth prospects. for the current year, we continue to anticipate inflation of 0. 9 %. for 2019, we have revised our forecast down from 0. 8 % to 0. 5 %. for 2020, we expect inflation of 1. 0 %, compared with the previous forecast of 1. 2 %. the conditional inflation forecast is based on the assumption that the three - month libor remains at – 0. 75 % over the entire forecast horizon. global economic outlook i would now like to turn to