three potential channels of effects from these events to australia. the first is a direct trade link. australia ’ s exports of goods and services to europe are actually quite modest ( table 1 ). by far the biggest trade relationships these days are with asia. hence, a bigger impact of the euro crisis on australia would come indirectly via trade with asia. it is pretty clear that growth across much of east asia moderated in 2011 and that there has been some effect of the slower euro area economy on asian exports. there have been other forces at work too – the japanese tsunami a year ago had significant effects on production chains around asia. these effects had probably not completely disappeared when the floods in thailand had another significant impact, which may still be affecting the data. so detecting the effects of weaker european growth against the backdrop of the supply disturbances to trade patterns following these natural disasters might be a little like trying to pick up one conversation in a crowded room : there ’ s a lot of background noise. bis central bankers ’ speeches but most of the high - frequency data on trade and production did not seem to show the slowing intensifying as we went into 2012. it is too early yet to say that a new strengthening is under way. but we do not seem to be seeing the signs of a rapid fall in trade that we saw in late 2008. a reference to 2008 brings me to the third channel through which we think about the effects of the european crisis. and it is perhaps the most unpredictable and potentially most damaging kind : the financial link. it would not be the direct exposures of australian institutions to the most troubled countries of europe that would be of concern, because those are quite small. it would be the more general impact on global markets of a european problem. what we saw in late 2008 was effectively a closure of funding markets for financial institutions for a period, after the failure of lehman brothers. these sorts of events affect virtually all countries, because the impacts on credit conditions, trade finance, share prices, and household and business confidence – all of which lead to precautionary behaviour – occur almost instantaneously everywhere. there was a period late in 2011 where there was a genuine fear that this could happen again. funding markets tightened up and effectively closed for many european banks. interbank activity more or less ceased in europe. the cocktail of sovereign credit concerns, large bank exposures to those sovereigns, possible bank capital shortfalls and prospective large debt rollover needs of banks, not to mention

news conference berne, 13 june 2019 thomas jordan introductory remarks by thomas jordan ladies and gentlemen it is my pleasure to welcome you to the swiss national bank ’ s news conference. i will begin by setting out our monetary policy decision and our assessment of the economic situation, and will also be explaining an adjustment to our monetary policy strategy. i will then hand over to fritz zurbrugg, who will present this year ’ s financial stability report. after that, andrea maechler will talk about the situation on the financial markets, the progress made in replacing the libor, and the snb joining the network for greening the financial system. finally, we will – as ever – be pleased to take your questions. monetary policy decision and introduction of the snb policy rate let me begin with our monetary policy decision. we are maintaining our expansionary monetary policy. interest on sight deposits held by banks at the snb remains at – 0. 75 %, and we will continue to be active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. our expansionary monetary policy remains necessary. we thereby stabilise price developments and support economic activity. at our monetary policy assessment we also decided to make a small adjustment to our monetary policy strategy. we are now introducing the snb policy rate, which will take over the function previously performed by the target range for the three - month libor. the snb policy rate currently stands at −0. 75 %. the reason for this adjustment is that the future of the libor is not guaranteed. the uk ’ s financial conduct authority will only ensure that the libor is maintained through to the end of 2021. the volume of money market transactions underlying the libor has dwindled. this has also placed a question mark over the basis for its calculation. given that our monetary policy is focused on the medium term, we are already adjusting our strategy at this juncture. page 1 / 5 berne, 13 june 2019 thomas jordan news conference our inflation forecast is based on the assumption that a specified interest rate remains unchanged over the entire forecast horizon of three years. the current forecast extends beyond the end of 2021 for the first time. the introduction of the snb policy rate ensures that it will be based on the same interest rate over the entire horizon. so what is the snb policy rate, and what changes does this entail for our monetary policy strategy? in answering these questions, please allow me to give you