andrea m maechler : monetary policy in 2015 – a first assessment speech by ms andrea m maechler, member of the governing board of the swiss national bank, at the money market event, geneva, 19 november 2015. * * * accompanying slides can be found at the end of the speech and on the swiss national bank ’ s website. the speaker would like to thank dirk faltin, marco huwiler and bettina simioni for their valuable support in preparing this speech. she is also grateful to vincent crettol and peter kuster for helpful comments and snb language services for their assistance. ladies and gentlemen it is my great pleasure to welcome you tonight to our traditional money market event. i feel very honoured to be here in geneva, the city of my birth, giving my first public speech for the swiss national bank ( snb ), having joined the governing board in july this year. it has been a very eventful year for monetary policy in switzerland. in january, the snb took two momentous decisions : it discontinued the minimum exchange rate against the euro, and lowered the interest rate on sight deposits further into negative territory. thus, the snb ’ s monetary policy has changed significantly. tonight, i shall provide a first assessment of this new monetary policy environment. my speech is divided into three parts. first, i shall discuss the snb ’ s monetary policy since the discontinuation of the minimum exchange rate, and the impact on the swiss franc exchange rate. second, i will assess how the negative interest rate as a policy instrument has been transmitted to different segments of the financial markets. finally, i shall discuss the outlook for economic growth and inflation in switzerland. following my speech, my colleague dewet moser will take a closer look at the many operational aspects involved in the implementation of our monetary policy. monetary policy environment : breaking new ground on 15 january, the snb discontinued its minimum exchange rate of chf 1. 20 to the euro, and announced a further cut in the interest rate on sight deposits to – 0. 75 %. these decisions were the response to international developments. over the course of 2014, market participants began to expect that the us central bank, the federal reserve would start increasing its policy rates. meanwhile, the ecb indicated that additional monetary stimulus would be required in the euro area. as a result, the euro weakened substantially against the us dollar. the euro / swiss franc minimum exchange rate came under intense

of the framework in its finalization. several of the remaining issues involve quite a number of calibrations based on the accumulation of very technical and expert considerations, such as the measurement of risk - weighted assets. the outcome of these considerations would have a significant impact on the determination of required macro capital and the risk - taking behavior of financial institutions. i would like to emphasize that the calibration should be finalized in such a way that the amount of risk - weighted assets and required capital as a whole would be maintained at an appropriate level, while taking a holistic approach in examining effects on the institutions. the second point is the necessity of a review of the effects and impacts of these regulatory reforms after their implementation. reforms of international financial regulations to date have been drastic enough that it is no exaggeration to refer to them as a “ fundamental re - design. ” looking at individual countries, large - scale financial and structural reforms are underway, as typified by the volcker rule in the u. s. the extent of the effects and impacts of these regulatory reforms on international financial intermediation and flow of funds in the financial sector as a whole remains unknown, and therefore requires close monitoring. from a long - term perspective, in order for the financial system to ensure stability and in turn contribute to sustainable economic growth, financial institutions need to be sufficiently profitable through active and innovative financial intermediation. in this regard, it is important to remove any regulatory excess, inconsistency among regulations, and uncertainty regarding the regulatory environment. concluding remarks that brings me toward the end of my speech. topics for discussion regarding macroprudential policy go beyond those i have raised today. one such topic regards the effective institutional arrangements for macroprudential policy. needless to say, there is no such thing as a universally optimal set of arrangements, as financial and economic structures as well as legal frameworks differ from country to country. moreover, the desirable form of arrangements would vary depending on the kind of macroprudential measures each country intends to utilize. looking at the recent developments in countries with multiple regulatory and supervisory authorities, there has been quite a number of movements to establish new bodies or councils in charge of macroprudential policy. in japan, the financial services agency ( fsa ) - which is legally authorized to conduct industry - wide supervision and inspections - and the bank - which contributes to financial system stability, such as through the “ lender of last resort ” function are making