and “ decreased considerably ". net percentages for the “ other factors ” refer to further factors which were mentioned by banks as having contributed to changes in credit standards. latest observation : january 2023 bls. in the light of this, we increasingly need to consider the risk of overtightening. after many years of low growth, tipping the economy into a full - scale recession could trigger a permanent destruction of productive capacity and harm future employment opportunities, especially for the vulnerable members of society. even if subsequently corrected, such overtightening would be very costly, given the low flexibility of the european economy. overall, monetary policy needs to react forcefully when major shocks hit the economy and push inflation in a clear direction. but when risks are more balanced, a data - dependent approach is a prerequisite to avoiding costly mistakes. clarifying the reaction function for such a data - dependent approach to be effective and avoid exacerbating uncertainty, we need to give some guidance on our future policy. although we should avoid giving unconditional forward guidance on the policy rate path many months ahead, a meeting - by - meeting approach alone may not suffice. it may leave investors in the dark, having to guess our future moves and focusing on the near term [ 21 ]. to deal with this conundrum, we must instead provide investors with a framework for how we evaluate and respond to the incoming information. in other words, we need to clarify our reaction function. in line with our price stability mandate, our reaction function is informed by the inflation outlook as well as the risks surrounding it. and it is designed to ensure that inflation returns to 2 % without undue delay, taking into account the lags with which our monetary policy operates. a proper understanding of this reaction function can benefit from two important clarifications. the first is what will contribute to determining our reaction – that is, the set of factors that will affect inflation the most at our medium - term policy horizon [ 22 ]. at the global level, the most significant of these factors are energy prices, simply because lower energy prices are crucial for current inflationary pressures to unwind. as for the domestic economy, a key factor in the coming months will be how rapidly lower energy prices and the associated lower cost pressures for firms are passed on to retail prices. in this respect, we need to carefully monitor mark - ups and wage growth, which could push in the opposite direction ; for wages, we need to distinguish one

, efficient authorities, and a solid and secure infrastructure. this constitutes a strong underpinning for financial service providers. but let us not rest on our laurels. we must try to avoid creating any administrative hurdles that neither contribute to stability nor bring any great benefit, but instead unnecessarily restrict the activities of financial service providers. transfer stamp tax and withholding tax, for instance, curb the potential for growth in switzerland. the reform of the withholding tax system and the abolition of transfer stamp tax on domestic bonds are expected to strengthen the swiss capital market. 2 this would not only benefit the financial sector, but also improve the financing options available to companies. it would also benefit small and medium - sized enterprises, for which such opportunities have been very limited until now. cf. roadmap for financial market policy switzerland 2020 +, advisory board for future of swiss financial centre, 2019. page 4 / 5 open market access switzerland undoubtedly owes much of the prosperity it enjoys today to open markets and thriving trade. however, for the export - oriented parts of the swiss financial industry, limited market access continues to be an obstacle restricting growth potential. market access to some countries has deteriorated since the financial crisis. this especially affects wealth managers who are operating in our relatively small domestic market. measures to facilitate market entry would therefore be helpful. and there are new opportunities to be developed in the multilateral trading system too. until now, the liberalisation of global trade has focused on goods. liberalisation of trade in services could offer new growth potential for financial service providers. closing remarks i come now to the end of my speech. ladies and gentlemen, good framework conditions are key to ensuring that our financial centre remains a global leader. they must be safeguarded at all times, and, where appropriate, improved. in addition, and speaking more generally, good framework conditions help companies in all sectors find corporate responses to challenges such as coronavirus, but also to structural changes. they provide the foundation for private market participants to be economically successful and compete at an international level. this is, of course, especially true of the financial sector. thank you for your attention. page 5 / 5