, the snb has a statutory mandate to pursue a monetary policy serving the interests of the country as a whole, to ensure price stability and in so doing, to take due account of the development of the economy. within this primary framework, it also has the task of contributing to the stability of the financial system. there is no contradiction between these tasks if target hierarchy is observed. as far as financial stability is concerned, the snb works closely together with the swiss financial market supervisory authority and the federal department of finance to create a regulatory environment that promotes stability. the snb concentrates on the macroeconomic and macroprudential aspects of regulation. for the macroprudential tasks, a new instrument was created this year – the countercyclical capital buffer. according to the relevant regulation, this buffer can be activated by the federal council following a proposal by the snb. the snb ’ s monetary policy remains focused on the maintenance of price stability in the medium term and, since september 2011, on the enforcement of the minimum exchange rate. consequently, possible distortions in the growth of credit aggregates that could endanger financial stability should be managed, first and foremost, with the macroprudential toolkit. 5 cf. speech by jean - pierre danthine, “ taming the financial cycle ”, 30th suerf colloquium, zurich, 5 september 2012. bis central bankers ’ speeches concluding remarks in conclusion, i would like to stress that we are living in an exceptional monetary policy situation, and not in a new world. the flexibility shown by central banks in the crisis was necessary to prevent a downward spiral. apart from the central banks, governments have also taken measures to manage the crisis. important steps have been taken in the regulation of banks, including the tightening of capital requirements. measures to bring about a longterm restructuring of public finances, however, remain unsatisfactory in many countries. monetary policy has opened up a time slot that will enable this to be done. it would be disastrous for the long - term future of the global economy if it were not used. in the countries most concerned, government budgets must be returned to a sustainable path as soon as possible. moreover, a consolidation of this kind would reduce the risk of overburdening monetary policy. as far as switzerland is concerned, the minimum exchange rate against the euro will continue to apply. the reasons behind the setting of the minimum exchange rate in september 2011 retain their validity. the

prices of gasoline and other energy products, significantly restraining overall inflation. at about the same time, the foreign exchange value of the dollar strengthened, holding down prices of imported goods. but oil prices have stopped declining and indeed have risen from their low point earlier this year. and, since the beginning of the year, the dollar has been roughly unchanged against a broad basket of currencies. as the downward pressure on prices from these two forces dissipates and as the labor market strengthens further, i expect inflation to move back to 2 percent. bis central bankers ’ speeches the economic outlook let me now turn to the outlook for the economy. gdp growth was reported to have been relatively weak early this year, but this measure of growth in economic activity can vary significantly from quarter to quarter. indeed, while spending data for the second quarter are limited at present, recent data on retail sales and motor vehicle sales point to a significant stepup in consumer spending and gdp growth this quarter. 6 stepping back from near - term indicators, i would like to focus more broadly on the factors likely to affect economic performance over the coming years. next week, concurrent with our policy meeting, the fomc participants will release a new set of economic projections. those could, of course, differ from the previous set of such projections in march. but speaking for myself, although the economy recently has been affected by a mix of countervailing forces, i see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones. as a result, i expect the economic expansion to continue, with the labor market improving further and gdp growing moderately. and as i just noted, i expect to see inflation moving up to 2 percent over the next couple of years. let me start with the positive. the increase in employment over the past several years has contributed to higher household incomes and strengthening consumer confidence. if the may labor report was an aberration or reflects a temporary slowdown resulting from the weakness in economic activity at the start of the year, then job growth should pick up and support further gains in income. in addition, rising equity and house prices have helped restore households ’ wealth. the fall in oil prices has supported household purchasing power as well. simple calculations suggest that the average household has gained some $ 1, 300 in purchasing power since mid - 2014 from the fall in gasoline prices. 7 with continuing gains in disposable income and wealth, i expect consumer