financial sector regulation and oversight is, without a doubt, a tough challenge. but the snb is also faced with equally tough challenges in the area of monetary policy. iii. review of monetary policy in 2009 in 2009, the snb ’ s monetary policy activities were focused entirely on combating the financial and economic crisis and the associated deflationary trends. price stability, which is not compatible with either deflation or inflation, remained the core objective. as early as autumn 2008, the snb had adopted an expansionary monetary policy stance as a result of the increasingly unfavourable economic outlook and the prospect that inflation would be low for the foreseeable future. between october and december 2008, the snb lowered the target range for the three - month libor by a total of 225 basis points, to only 0. 0 – 1. 0 %. the snb also ensured a generous supply of liquidity to the money market. the economic situation continued to worsen into the spring of 2009. in addition, the uncertainty engendered by the financial crisis had led to a strong appreciation of the swiss franc against the euro. in view of the economic situation prevailing in switzerland at that time, there was the risk of a pronounced deflationary trend, in particular if the swiss franc were to appreciate further. this risk necessitated a further easing of our monetary policy. the substantial monetary policy easing therefore continued, with a further 25 basis point reduction in the libor target range in march 2009. this left the new range at 0. 0 – 0. 75 %, where it has since remained. the snb aims to keep the libor in the lower end of the range, i. e. at around 0. 25 % ; the one - week repo rate has been at practically zero since the end of 2008. the room for manoeuvre using the traditional interest rate instrument was thus effectively exhausted in march 2009. to relax monetary conditions further, the snb significantly increased liquidity. it did so via a number of unconventional monetary policy instruments. it concluded longer - term repos and purchased bonds issued by private sector borrowers. it also bought foreign exchange on the foreign currency market and acted to prevent the swiss franc from appreciating further against the euro up to the end of the year. against the background of the economic recovery, following its monetary policy assessment in december the snb is acting only to decisively counter an excessive appreciation of the swiss fran

percent for 2017, and should remain solidly on - target over the 2018 – 19 policy horizon. there is ample domestic liquidity. bank lending is strong but prudent, and funds continue to flow into productive sectors. the banking sector is in sound condition as reforms put in place by the bsp over the last decade, along with banks ’ implementation of better corporate governance and risk management have brought about big improvements in bank asset quality, business operations, and strong capitalization. time of great advancement we are in time of great advancement. innovation is at the forefront of economic development. and you are the very generation that knows how to leverage on this! in one click, you obtain information that we used to find slowly and tediously in volumes of dusty encyclopedias. almost in an instant, you send and receive messages that, in the past, took us weeks to give and get. these innovations have produced great strides in communication, finance and commerce. we are in tune with the times. i am also eager to share that the bsp is creating a regulatory environment to encourage innovation and maximize prudent technology use. an ecosystem is being created so that the unreached are granted financial services through alternative providers. bsp is piloting its own “ regtech ” solutions to address its operational pain points. our goal is that through technological solutions — financial consumers and investors would be able to make more informed business decisions and choose from a longer, fresher and more innovative menu of available financial products and services. we see the digitalization of finance as essential to achieve significant inroads against financial exclusion and payments inefficiency. we adopted the national retail payments system ( nrps ) project, a flagship program for digital finance. its purpose is to establish a safe, efficient and reliable means to transfer money value digitally. envisioned is an effective and interoperable interface of various electronic payment channels. the nrps will expand the reach of financial services and will promote efficiency, transparency and development of business models improving economic competitiveness. with the nrps, we hope to transition from a cash - heavy economy, where 99 percent of retail transactions by volume are done in cash, to a cash - lite economy, with transactions becoming mostly electronic. collaboration and cooperation in making all these happen, the bsp counts on its partners and stakeholders in the private sector, in the government, and in the academe. we understand that we cannot achieve our goals alone. especially as we create an enabling