and calculate, and it is also suitable as a store of value. however, the importance of money that retains its value goes far beyond these three narrowly defined functions. sound money contributes to preserving the real value of financial claims with fixed nominal amounts, such as savings deposits, bonds, employment contracts and pensions. it thus creates security and trust, which in turn promotes social harmony and cohesion. money is therefore sound if it neither depreciates nor appreciates, i. e. if there is neither inflation nor deflation. but how can we measure the development of the value of money over time? to do so, we have to take as our basis the development of its purchasing power. it thus makes sense to measure the value of money using a basket of goods and services that is as representative as possible of consumer spending, as switzerland does with the consumer price index. 1 the value of money thus depends on the transaction prices of goods and services, and its development over time can be measured using the price of the basket. central bank money and bank deposits having looked at what constitutes sound money, let us now turn to the two types of money that are circulating in parallel in the current monetary system and that can be exchanged for in its monetary policy strategy, the snb equates price stability with a rise in the swiss consumer price index of less than 2 % a year. deflation – i. e. a sustained decrease in the price level – also breaches the objective of price stability. with this definition, the snb takes into account the fact that it cannot steer inflation precisely and that the consumer price index tends to overstate inflation slightly. page 3 / 8 each other : central bank money and bank deposits, that is to say book money of banks. 2 in switzerland, central bank money comprises the banknotes issued by the snb and the sight deposits held at the snb by financial market participants, primarily banks. the federal act on currency and payment instruments stipulates that the money issued by the snb is legal tender in switzerland and that the swiss franc, which is divided into 100 centimes, is the swiss currency unit. 3 central bank money and its unit of account thus form the anchor of our monetary system. the snb ’ s money defines the value and characteristics of our currency and thus also provides the basis for bank money. bank deposits are not legal tender, however. they are instead much more a private claim against a bank. on demand,

s response to the coronavirus shock 2 / 3 bis central bankers'speeches europe ’ s fiscal policy response to the coronavirus shock has been crucial in cushioning the immediate impact of the crisis on member states ’ economies. national fiscal policy measures continue to be the first line of defence to secure employment and safeguard the survival of productive firms. these emergency measures should be as targeted and temporary as possible. the three safety nets agreed at the european level complement national efforts, with up to €540 billion of additional funding support being made available for workers, companies and sovereigns. an ambitious and coordinated euro area fiscal stance remains critical to support the recovery. the recovery fund ( under the “ next generation eu ” umbrella ) agreed by the european council in july will provide much - needed further macroeconomic support and build a ramp towards a modern, green and digital european economy. it will be important to ensure that the european funding for the recovery is used in a timely manner and in a way that enhances long - term growth and resilience and supports common eu objectives. international crisis response as national authorities have been taking the necessary steps to fight the pandemic, global cooperation and resource - sharing across nations continue to be vital. addressing international trade disruptions, preserving trade openness and ensuring universal access to vaccines and treatments will be of paramount importance for a durable global economic recovery. further international efforts will be needed to counter the consequences of the pandemic and maintain a well - functioning international monetary system. the ecb supports the crisis response measures taken by the imf. we continue to be open to exploring a possible new special drawing rights ( sdr ) allocation for all imf members. we welcome progress on implementing the agreed reforms to double the new arrangements to borrow and the new round of bilateral borrowing agreements on 1 january 2021. still, the imf resources need to be kept under close review. given high debt levels worldwide, we are also broadly supportive of the imf ’ s comprehensive work agenda on debt issues. during the first phase of the pandemic shock, major central banks, including the ecb, took coordinated action to enhance the provision of us dollar liquidity. in addition, the ecb agreed to bilateral euro swap and repo line arrangements with some eu and eu neighbouring countries ’ central banks. it also established a new precautionary backstop facility ( eurep ) under which euro liquidity can be provided against high quality euro - denominated collateral to a broader