lsap = large scale asset purchases, mep = maturity extension programme, apf = asset purchase facility, qqe = quantitative and qualitative easing 17. 11. 2016 financial markets and monetary policy implementation – an evolving relationship | andrea m. maechler | © snb sources : andrade et al. ( 2016 ), snb central banks further reduced long - term interest rates by purchasing government bonds sources : imf, snb the different asset classes are more strongly correlated today than before the crisis 17. 11. 2016 financial markets and monetary policy implementation – an evolving relationship | andrea m. maechler | © snb sources : bloomberg, snb equity prices in the us reached new highs despite falling earnings expectations 17. 11. 2016 financial markets and monetary policy implementation – an evolving relationship | andrea m. maechler | © snb sources : bloomberg, snb little change in us equity market ’ s pre and postcrisis reaction to news 17. 11. 2016 financial markets and monetary policy implementation – an evolving relationship | andrea m. maechler | © snb thank you for your attention © swiss national bank

setting of narrowing but still yawning gulf between the macroeconomic conditions of india and the financially developed, capital - surplus nations. i am reminded of what fisher black is reported to have once remarked, “ the markets look more rational from the banks of charles than from the banks of hudson. ” the rise, fall and fate of principles based regulation - julia black lse law, society and economy working papers 17 / 2010 london school of economics and political science law department. bis central bankers ’ speeches 31. this brings me to my last and the most important point. the role of authorised dealers and fedai in times to come. the authorised dealers led a very protected life in the fera regime and never had to apply their mind to the permissibility of a foreign exchange transaction because it had to be based on an rbi permit or some other permit, for example, an import license. today, it is not so. when fedai was formed in the 1950 ’ s its role mostly evolved round computation of various forex rates and mostly interbank transactions. in the times to come, both authorised dealers and fedai will have to play an active role in ensuring that customer transactions are compliant with the regulations. the more we move towards a principle based framework, the more arduous will be the responsibility of the authorised dealers. this includes the issue of fair pricing as well. indeed, our success in moving to a principle based framework will depend on the involvement of ads. you will have to gear up for that responsibility. 32. finally, let me briefly recapitulate some of more important issues. a. in foreign exchange market, as in any other market, freedom is the default and any restraint by way of regulation has to justify itself. the regulation has to be based on sound economic principles and not on dogmas or evangelism. b. though the superiority of free markets as a way of organising economic activity is well recognised, there are many areas where the limitations of market have been widely discussed in the literature and are well accepted. there is no accepted standard for optimum regulation which is often idiosyncratic. the regulation of forex markets has to be seen in that context. as chesterton remarked, “ don ’ t ever take a fence down until you know the reason it was put up. ” c. more products go towards market completion and enable better hedging against risks, but are limited by the wisdom of the participants to use them. d. exact