at present. my colleague jean - pierre danthine will discuss the snb ’ s liquidity measures and their effects in more detail. both domestic mortgages and corporate lending in the real economy have continued to see robust growth. in the third quarter of 2011, lending standards and conditions for mortgages remained largely unchanged. by contrast, banks reported a slight tightening of lending standards and conditions for corporate loans – especially loans to large companies. low interest rates continue to have a favourable effect on the demand for loans. in addition, the robust growth in real estate prices, particularly prices for owner - occupied apartments, continued unabated in the third quarter. in this context, the snb welcomes the recent advances achieved in switzerland with the introduction of macroprudential instruments. my colleague thomas jordan will report on developments in the area of financial stability and macroprudential policy. chart of conditional inflation forecast the ( dashed ) red curve on the chart represents the new conditional inflation forecast. it shows the future path of inflation, assuming that the three - month libor remains unchanged at 0 % over the next twelve quarters, and it covers the period from the fourth quarter of 2011 to the third quarter of 2014. for purposes of comparison, the ( dash - dotted ) green curve shows the conditional inflation forecast published in the previous quarter, which was also based on the assumption of a three - month libor of 0 %. until the second quarter of 2012, the snb ’ s new conditional inflation forecast is below the previous quarter ’ s forecast. this is because the earlier swiss franc appreciation impacted on prices more quickly than expected. from the third quarter of 2012, inflation rises above the previous forecast, because at this point the negative base effect of price declines since mid2011 disappears. the muted course of inflation from the end of 2012 stems from the marked deterioration in the economic outlook for the euro area. overall, despite the expansionary monetary policy, there are no signs of inflation risks over the forecast horizon. bis central bankers ’ speeches bis central bankers ’ speeches

the risk of sharp appreciations. as a result of the introduction of euro notes and coins, the euro will increasingly be used as a means of payment in the tourism sector and the hotel and restaurant industry as well as in foreign trade, to some degree simply as a substitute for the d - mark. apart from very few viable exceptions, however, employment and loan contracts will continue to be concluded in swiss currency, and the large majority of domestic payments, too, will be effected in swiss francs in future. the euro will thus not emerge as a parallel currency in switzerland. the purview of swiss monetary policy will remain unaffected by the arrival of the euro. by retaining the swiss franc, we are able to pursue an independent monetary policy that is oriented to the needs of the swiss economy, and to keep interest rates at a low level. in this respect, the exchange rate is a key element for producing our inflation forecast and, therefore, for determining our policy. inflation forecast december 2001 with libor at 1. 75 % annual average inflation in % 1. 0 0. 9 1. 3 1. 5