, inflation, and the unemployment rate ) condition on market expectations of interest rates is one difference between the mpc forecasts and the fomc participants ’ projections that are summarized in the sep. another difference is that the sep consolidates information on the projections constructed and submitted separately by the individual fomc participants, while the inflation report ’ s economic projections are arrived at collectively by the mpc and are therefore the forecasts of the committee as a whole. this is another aspect of the differences of behavior between the two monetary committees that is both interesting and possibly important, but for which there is not enough time for a more detailed discussion. woodford ( 2013 ) provides an analysis of the value of forward guidance under various conditions, including the case in which the policy rate is at its lower bound. - 8 interest rate dot plot. in the united kingdom, the mpc started providing forward guidance in its postmeeting statements in 2013. 21 as the policy rate - - bank rate - - is still at its lower bound in the united kingdom, it remains to be seen whether mpc forward guidance will continue during policy firming. for its part, the fomc has provided forward guidance in its policy statements during the tightening phase that began with the increase in the target range for the federal funds rate in december 2015. asset purchases are less of a new tool than forward guidance. in the early postworld war ii decades, both u. k. and u. s. authorities sporadically attempted to influence long - term interest rates directly by transacting in longer - term treasury securities. by 1997, however, monetary policy operations in longer - term securities markets had fallen into disuse. 22 the financial crisis changed matters, with both countries ’ central banks expanding their balance sheets through large - scale purchases of longer - dated securities to put downward pressure on longer - term interest rates and set in motion movements in asset prices and borrowing costs that would stimulate spending by households and businesses. it is widely, though not universally, recognized that these asset purchases helped contain the economic downturns in the united kingdom and the united states and underpinned the subsequent recovery in each country. this experience raises the question of whether the balance sheet will continue to be a routine tool of monetary see carney ( 2014 ) for a discussion of the benefits of forward guidance for the u. k. economy. federal reserve operations for monetary policy purposes in longer - term securities markets had largely been absent since the operation twist

rent indicator, as well as valuations based on different models and underlying assumptions, for example regarding future interest rates. based on this range of assumptions and models, the snb currently measures the overvaluation in apartment prices to cf. ecb, financial stability review, may 2021, p. 35 ; board of governors of the federal reserve system, financial stability report, may 2021, p. 20, reserve bank of new zealand, financial stability report, november 2021, p. 14. cf. ecb, financial stability review, may 2021, p. 35 ; and bank of canada, financial system review, may 2021. be between 10 % and 35 %. 14 this range of overvaluation has increased since the start of the pandemic. moreover, we have observed an increase in affordability risks over recent years as measured by the rising lti ratios of new mortgages ( cf. slide 4 ). to maintain banking sector resilience in the face of these increased vulnerabilities, the federal council reactivated the sccyb in january this year to a level above the pre - pandemic one, following a proposal by the snb. this has brought the sccyb to 2. 5 %, its regulatory maximum. as a complementary measure, the self - regulation guidelines, which were last tightened in 2019, are still in place and should contribute to containing a further increase in vulnerabilities. the snb continues to monitor the developments on the real estate and mortgage markets very closely. our focus is to assess if the banking sector ’ s overall resilience is adequate given the level of risk - taking and the level of vulnerabilities in the macroeconomic environment. the build - up of regulatory and voluntary buffers in response to the gfc has led to a substantial increase in the overall resilience of the banking sector. going forward, this resilience must be preserved. as evidenced by the recent reactivation of the sccyb, this implies adjusting capital buffers in response to the development of vulnerabilities in the mortgage and residential real estate markets. let me conclude by underscoring that ensuring banking sector resilience is not a goal in itself. rather, it is instrumental in achieving more stable economic growth, and ultimately benefits not only the banking sector, but society as a whole. for a more detailed explanation, cf. swiss national bank, financial stability report, june 2021, p. 13. macroprude