, price stability was entirely re - established from november onwards. this reversal forced the snb to take rapid and decisive measures to ease its monetary policy. in a series of five steps between october 2008 and march 2009, we lowered the target range for the three - month swiss franc libor and brought down the market rate from 3 % to 0. 25 %. thus, by markedly loosening the monetary reins, we aimed to trigger an easing of lending conditions and discourage investment in swiss francs. the volume of lending in switzerland continued to rise, albeit at a reduced pace, but credit lines granted to swiss borrowers were now less used. to date, the state of the bank loan market reflects a drop in demand and a slight tightening of lending conditions in connection with the decline of the economy, rather than an actual credit crunch. on the other hand, we have noted a substantial deterioration in financing conditions for companies on the capital market due to the prevalent mood of uncertainty and the shortage of liquidity. this is why we decided, on 12 march, to intervene in those market segments where the imbalances were most pronounced. in this delicate phase of worsening credit market conditions, our monetary policy strategy proved to be particularly well chosen. unlike most other central banks, the snb has made it its objective to stabilise a market interest rate – the three - month swiss franc libor, which serves as a reference for numerous commercial rates – rather than a rate reflecting central banks ’ short - term refinancing conditions for commercial banks. by keeping the libor well under control, we have managed to shelter the swiss market from the kind of degradation of credit conditions experienced by markets abroad. thus, the three - month euro libor, which had generally been 1. 5 % higher than the three - month swiss franc libor, saw its spread widen to 2. 2 % in 2007 and 2. 7 % in 2008. our policy of stabilising the three - month swiss franc libor therefore enabled us to at least partly shield the swiss economy from the repercussions of the international financial crisis. unfortunately, the effect of relaxing monetary conditions since last autumn in order to lower the libor was largely offset by the continuing appreciation of the swiss franc against the euro. between october 2008 and march 2009, our currency rose by nearly 10 % vis - a - vis the euro, which was particularly inopportune in a phase of rapidly declining inflation rates and the

the special needs of the market in 2008, we had to lengthen the term of our loans on several occasions, extending maturity to as much as twelve months. unlike other central banks, however, we saw no need to expand the range of eligible securities, since we already apply a very liberal policy, accepting top - rated securities denominated not only in swiss francs, but also in euros, pounds sterling, us dollars and other currencies. in 2008, the average amount of our repos rose by 53 % against the year before. despite the intensification of our repo operations, tensions on the money market increased throughout the year owing to the ongoing deterioration of the economic and financial environment, and reached their peak in autumn. a particular source of difficulties was the extremely strong demand for swiss francs coming from eastern european countries, where banks had granted swiss - franc - denominated loans on a massive scale, refinancing themselves on the money markets. since these banks have no access to our loans, they found themselves in a delicate position when the swiss franc money market dried up. the increased demand for swiss francs contributed to the rise in our interest rates, which we deemed undesirable from a monetary policy perspective. to satisfy demand from eastern european banks, we sought the support of the european central bank ( ecb ), to which we remitted swiss francs under a euros against francs swap arrangement. the ecb then transferred these francs to its counterparties. similar agreements – euros against swiss francs – were subsequently concluded with the polish central bank and the hungarian central bank, enabling them to conduct analogous transactions in their respective countries. moreover, to ensure a better distribution of francs across the market, the snb itself engaged in swaps with its counterparties. by the end of 2008, our supply of swiss francs to three central banks and a certain number of other banking institutions by means of swap transactions had reached a total of chf 50 billion. thus, the demand for liquidity was considerable across the board. the total amount of our loans more than tripled, climbing from chf 31 billion at the end of 2007 to chf 101 billion at the end of 2008. in parallel, as a way of enabling banks to place their liquid means with the snb in a form other than sight deposits, and of introducing a tool which would allow us to absorb large amounts of liquidity if need be, we issued snb bills for the first time on 20