a further monetary policy easing. in view of the limited size of the domestic capital market compared to other countries, foreign currency purchases seemed the most appropriate course of action for switzerland. this allowed for the absorption of extreme exchange rate developments, which could have triggered a deflationary dynamic. in absorbing the upward pressure on the swiss franc, the snb may have taken on a higher balance sheet risk, however, in doing so, it countered the risk of a deflationary trend. although the swiss franc has appreciated sharply since the beginning of the year, the deflation threat has declined as the economic recovery has strengthened. the appreciation of the swiss franc has impaired the competitive position of swiss exporters. however, the negative impact on export demand has been reduced by robust economic growth in the economies importing switzerland ’ s goods and services. chart of conditional inflation forecast i would now like to comment on the new, conditional inflation forecast in more detail. the ( dashed ) red curve on the chart represents the new, conditional inflation forecast. it shows the future path of inflation, assuming that the three - month libor remains constant at 0. 25 % over the entire forecast horizon, and it covers the period from the fourth quarter of 2010 to the third quarter of 2013. for purposes of comparison, the ( dash - dotted ) green curve shows the inflation forecast published in september, which was also based on the assumption of a three - month libor of 0. 25 %. the new conditional forecast shows that inflation remains low for 2011 and 2012. the forecast for the next few quarters is revised because new data has been taken into account. the new forecast for 2011 is slightly above that published in september because the oil price has increased. the increase in inflation in the third quarter of 2011 is attributable to a base effect, because inflation in the third quarter of 2010 was comparatively low. compared to the forecast published in september, inflation in 2012 and 2013 rises less steeply, particularly due to the fact that the economic outlook for europe is less favourable than in the previous quarter. towards the end of the forecast horizon, inflation rises briskly and exceeds the upper bound of 2 %, assuming that the three - month libor remains at the current level. this shows that the current expansionary monetary policy cannot be pursued for the entire forecast horizon without compromising long - term price stability. due to the risks mentioned previously, this forecast is associated with a very high level of uncertainty.

marion williams : the current turbulence in the us financial markets and its implications for barbados comments by dr marion williams, governor of the central bank of barbados, on the current turbulence in the us financial markets and the implications for barbados, bridgetown, 24 september 2008. * * * while the current turbulence in the us financial markets is unlikely to have a significant impact on barbados immediately, as the us economy slows or goes into recession as it copes with these difficulties, the result could be a slowdown in the growth of the barbados economy going forward. recession in the uk and some european economies would also impact adversely on our tourism prospects and our investment inflows. however, the barbados financial system should remain sound although there may be some loss in value ( realised and unrealised ) on us dollar fixed income securities held by financial institutions, including the central bank, as securities ’ prices in the us markets tumble. however, such losses in value are not expected to be significant in relation to the overall portfolios of these institutions, particularly over the medium term and especially for those who tend to hold short to medium term securities to maturity. for non - bank institutions with us equity portfolios, long - term investors would have some tolerance to the current volatility in the equity market but may record unrealised losses in the short term. for some institutions in the international financial business ( or offshore ) sector who trade more aggressively in us stocks and in fixed income securities and more especially in derivative instruments, particularly those who may have been doing active business with those us financial institutions involved in the us financial melt down, realised losses may be recorded. this is likely to be mitigated by the actions of the us government to bail out these institutions. details of the bailout are not yet clear, but it is expected that there will be free access to assets placed with these institutions where funds are held in an agency or custodial capacity on behalf of overseas investors. funds held in the capacity of agent by these us institutions should retain their agency status and should not be affected by the financial losses of these institutions. administrative hurdles during the adjustment period may however hamper immediate access. any problems of access to funds held in an agency capacity are expected to be short - lived if the bailout goes through. in any event, the investment activities of the offshore sector are segregated from the local banking system. in the interim, investors in overseas markets should be cautious about the external financial advisers, consultants and cu