philipp hildebrand : the swiss national bank ’ s view of international financial markets against the background of trends in the united states introductory remarks by philipp hildebrand, member of the governing board of the swiss national bank, at the end - of - year media news conference, zurich, 12 december 2003. * * * the past year was a turbulent one for the international financial markets, which were essentially influenced by trends in the us. during the first half of 2003, market developments were shaped by economic and deflation fears as well as by the war in iraq. in this environment, equity markets reached an annual low in march. in june, bond market yields fell to their lowest level. the second half of the year saw an economic recovery in the us, which is now spreading to other economic regions as well. capital markets long - term yields on swiss paper rose by approximately 60 basis points from their low in june to roughly 2. 7 %, approximately tracking yields in the euro area. in both cases, yields followed the us market very closely, albeit with modest fluctuations ( see graph 1 ). under the present economic conditions, the interest rate environment in switzerland is still viewed as attractive by consumers. the high level of new fixed - rate mortgages is an indication of this sentiment. the higher swiss yields reflect the improved economic outlook and not inflation expectations, which are modest given that there is still pronounced underutilisation of capacities. in contrast to capital market yields, money market yields were decidedly stable. the three - month libor remained almost constant at 0. 25 %. the global trend in capital market yields was chiefly determined by long - term yields in the us, which themselves were shaped by the recovery of the us economy. in the early summer, deflation fears had dragged the yield on ten - year us government bonds down to 3. 1 % - a level last reached at the end of the 1950s. in july and august, however, positive economic data pushed the yield right up to 4. 6 %. convexity hedging was one of the factors contributing to the unusual scale of the turnaround. as interest rates fell in the early summer, the refinancing of existing mortgages - which is possible in the us at any time - had triggered extensive buying of government bonds. us investors holding substantial mortgage portfolios had to make these purchases in order to keep the residual maturities of their portfolios constant. when interest rates rose, therefore, the correction was similarly swift

thomas jordan : comments on swiss monetary policy speech by mr thomas jordan, chairman of the governing board of the swiss national bank, at the 106th ordinary general meeting of shareholders of the swiss national bank, berne, 25 april 2014. * * * mr president of the bank council dear shareholders dear guests the swiss national bank ( snb ) has a mandate to ensure price stability, while taking due account of the development of the economy. the monetary policy decisions needed to fulfil this mandate have a direct impact on the size and composition of our balance sheet. as a result of the current size of our balance sheet and the nature of our investments, it can be assumed that the annual results will continue to fluctuate significantly in the foreseeable future. since summer 2007, the global economy has experienced a series of crises. at times, it was on the brink of the abyss, and the threat to the swiss economy was correspondingly great. in order to fulfil our statutory mandate, we have been obliged to resort to unconventional measures, rather than operating solely with the familiar monetary instruments. the most exceptional measure was certainly the introduction and enforcement of the minimum exchange rate against the euro. however, the creation of the stabilisation fund to take over illiquid assets from ubs was also a special measure. in 2013, this episode was successfully concluded. by contrast, the minimum exchange rate remains the snb ’ s key monetary policy instrument. this remains true even though we have not had to enforce the minimum exchange rate with foreign currency purchases since autumn 2012. in my comments today i will explain the reasons why we are maintaining the minimum exchange rate. i will begin with a brief look at global economic developments. then i will present our forecast for the global economy and the swiss economy. based on this, i will follow with an examination of the outlook for price stability. as you know, in our view, developments on the swiss mortgage and real estate markets represent a risk for financial stability. i will therefore use this opportunity to follow up with a brief presentation of our considerations on this topic. i will round up my remarks with two examples which illustrate the link between monetary policy decisions and our balance sheet. global economic developments in 2013 first, let me begin by reviewing the events of 2013. on the one hand, there was a certain feeling of renewed confidence last year. this can be mainly attributed to the ebbing of the european financial and debt crisis. the alleviation of the crisis