in the long term and price stability is the essential responsibility of the monetary authorities. the task is complicated by interaction with the other factors – for example, by the impact of global resource constraints or the growing concerns about climate change – but monetary policy stays firmly focused on delivering price stability, which is important for the efficient working of the market system and the optimal allocation of resources. by maintaining price stability over the medium term, which means pinning down trend inflation and ensuring that inflation expectations are firmly anchored, central banks contribute to the smooth functioning of the economy, to sustainable growth and to job creation. the ecb with its mandate for price stability is firmly focused on this policy goal. as one dimension of the complexity of the present global economy is the financial market turbulences, let me elaborate a little bit on the actions taken by the ecb. at the eurosystem we made a clear distinction between setting the monetary policy stance to maintain price stability over the medium term and its liquidity decisions taken in the course of implementing this stance. this distinction serves to isolate signals of the monetary policy stance from the noise introduced by liquidity movements and volatility in very short term rates. since the onset of financial tensions in august 2007, the actions of the ecb have fully respected this principle. in both “ normal ” and “ turbulent ” times, the primary objective of eurosystem ’ s open market operations is to keep the overnight rate as close as possible to the minimum bid rate. however, during the recent period of turbulence open market operations aimed also at ensuring the continued access of solvent banks to liquidity notably by contributing to smoothening the impaired functioning of the money market. from the very first day of the financial market turmoil, in an environment of increased liquidity risk and in response to banks ’ changed liquidity demand pattern, the ecb has achieved these objectives through relatively minor, technical changes to the way in which it supplies liquidity in normal times, while at the same time utilizing the latitude given by its framework for monetary policy implementation. first, the eurosystem has adjusted the distribution of liquidity supplied over the course of the maintenance period, by frontloading the supply of liquidity at the beginning of the period and reducing it later, so that the total amount of liquidity over an entire maintenance period is unchanged. second, during the turmoil the eurosystem has applied different open market procedures for supplying liquidity to the banking system. more specifically, 1. the use of fine - tuning operations

implementation, a strong and broad transmission of the snb ’ s interest rate policy is crucial for ensuring appropriate monetary conditions. while some financial products, such as variable - rate mortgages, are priced directly on the basis of saron, the saron - based swap curve also plays an important role in facilitating a broad transmission. this is because most financial products, such as swiss franc - denominated mortgages, loans and bonds, are priced using the saron - based swap curve. thus, saron is not only the most important directly used reference rate in switzerland, but it also serves as an anchor for the swap curve and is therefore also relevant for other swiss franc interest rates. 10 adjustments to the snb ’ s interest rate policy are transmitted to the saron swap curve. while the snb directly controls saron, the short end of the swap curve, it also influences longer - term rates by shaping expectations, for example via the publication of its quarterly conditional inflation forecast. 11 chart 9 illustrates this by showing the saron swap curve at three different points in time. in may 2022, just before the first increase in the snb policy rate, the swap curve was upward sloping, as expectations of higher future interest rates were priced in at the longer end of the curve ( blue line ). a year later, the swap curve was almost flat, as short - term rates had risen significantly more than longer - term rates ( red line ). this picture was consistent with market participants ’ expectations that no further rate hikes were needed to prevent inflation from rising. today, the swap curve is inverted, which is consistent with market participants ’ expectations of moderate inflation and further cuts in the snb policy rate in the near future ( yellow line ). adjustments to the snb ’ s interest rate policy are also transmitted to other segments of the financial market. for transmission to be effective, the snb policy rate must influence not only interest rate swaps, but also all other relevant financial market segments. chart 10 shows the path of several 10 - year interest rates from 2021 onwards. as you can see, the interest rates on mortgages ( red line ), one of the main financial products offered by banks, have closely tracked swap rates since the beginning of 2022 ( blue line ). 12 yields on other financial market products, such as corporate bonds ( green line ) and covered bonds ( yellow for a broader discussion of how saron replaced libor as the main swiss fran