since macroprudential policy measures have been in place for a relatively short period of time compared to other macroeconomic policies, however, their effects need further verification. while hong kong, brazil and turkey have introduced macroprudential policies or strengthened related regulations in the wake of the global financial crisis, it is too early to decide on their effectiveness. bis central bankers ’ speeches macroprudential policies should capture potential systemic risk factors before financial instability gets out of control and turns into a crisis and be applied preemptively. what is most important is to determine the appropriate timing of their application. in addition, since the development of indicators designed to determine the choice and settings of these macroprudential policy tools is still at an early stage and the data on the basis of which they are determined is insufficient, the conduct of policy should be based on more abundant and sophisticated micro data when implementing policies. macroprudential policy instruments are normally applied in the form of regulations on financial institutions. as the pursuit of regulatory arbitrage by financial institutions including the use of shadow banking could undermine the policy effects, we need responses to deal with this. it has been assumed so far that macroprudential policy measures will be used mostly during economic expansion. we should be however mindful of asymmetry as well which rather accelerates procyclicality or weakens regulatory effects during economic downturn. harmonious operation between monetary and macroprudential policies as mentioned earlier, countries around the world do not yet have enough experience with implementation of macroprudential policies and systemetic risk indicators measuring the degree of financial uncertainty are still under development. against this backdrop, it would be difficult to expect satisfying synergy effects from the mutual complementarity of macroprudential and monetary policies. if the effects of the two policies overlap or are in conflict and they are not operated harmoniously, this may give rise to the problem of excessive or offsetting policy effects, as they both work by way of changes in financial institutions ’ balance sheets. if macroprudential policy works smoothly toward the targeted objectives at an opportune time, however, it can form a mutually complementary relationship with monetary policy and thus maximize social welfare through price stability and financial stability, as suggested by stijn claessens and others of the imf. this view claims that, as we can see from the experience of the financial crisis, it is possible to respond to the accumulation of financial imbalances

different dates. consequently, this is a money market transaction that does not involve any exchange rate risk, thus differing from foreign exchange interventions. bis central bankers ’ speeches monetary conditions. once the economic recovery had gained hold, the foreign currency purchases were suspended in june 2010. however, in summer 2011, the situation became so acute that the snb had to take action again. after having employed the less far - reaching measures which i mentioned before, we set a minimum exchange rate against the euro on september 6, 2011. since then, the snb has made it perfectly clear that it is prepared to enforce this minimum rate through unlimited foreign currency purchases, if necessary. in setting a minimum exchange rate against the euro of chf 1. 20, we were reacting to the extreme appreciation in the swiss franc. as you may recall, the price of the euro temporarily fell to as little as chf 1. 00 and that of the dollar to 70 centimes. the snb ’ s aim with the minimum exchange rate is not to fine - tune the economy, but to provide the market with some guidance during a phase of great uncertainty. the objective is to prevent severe damage to the swiss economy from a very substantial and possibly longlasting overvaluation of the swiss franc. accordingly, the snb has set the minimum exchange rate at a level where the value of the swiss franc remains high. impact and risks when evaluating the accommodative monetary policy and unconventional measures, we need to take account of effects as well as risks. what can we say about the effects? the way i read the available data, conventional and unconventional measures taken by central banks have made a decisive contribution to preventing the global economy from drifting into deflation and depression. however, the slow recovery reminds us that monetary policy is not omnipotent and is not in a position to solve all problems. fiscal consolidation and the structural reforms required for the improvement of growth potential in many countries cannot be replaced by monetary policy measures. an evaluation of the impact of the individual unconventional measures is more difficult. the simplest to assess is the minimum exchange rate. this instrument has made a decisive contribution to stabilising the swiss economy. the export industry is gaining ground again, and the deflationary expectations that were threatening to take hold were checked. it is more difficult to assess the impact of forward guidance and quantitative easing. certainly, longterm interest rates have fallen to record lows this year in some areas.