operations only have a direct influence on current short - term interest rates. economic activity and thus future price developments are, however, determined primarily by the shape of the yield curve, i. e. by the expectation of future monetary actions. transparency about how we judge future inflationary pressures enables us to guide expectations about future short - term interest rates and thus also long - term interest rates. the second reason is that transparency reduces the inevitable uncertainties related to monetary policy implementation. if markets know how we judge future inflationary pressures and how we may react to these, they can better predict our future monetary policy. improved predictability of monetary policy leads to fewer painful surprises in the economy. moreover, less uncertainty about monetary policy reduces both risk premiums in financial markets, and financing costs. the third rationale for central bank transparency is public and political accountability. central banks are mandated to act in the interest of their country, usually by maintaining price stability. this can imply unpopular decisions, which is essentially the reason for central bank independence.. central banks should thus be free from public and political pressure. but it is obvious that some mechanism must be set in place to ensure accountability of independent central banks. transparency about monetary policy is essential to central bank ensure accountability. however, transparency in itself is not enough. the statements made by central bankers must be accessible to the public and must be subject to scrutiny. here, a critical press has a very important role to play. 2. communication of monetary policy by the swiss national bank in order to improve monetary policy effectiveness and enable public accountability the swiss national bank started to regularly explain its monetary policy decisions to the public already in the 1970's. our first press conference was conducted in november 1974, shortly after the collapse of the brettonwoods fixed exchange rate regime. moreover, from 1975 onwards we published yearly goals for the growth of monetary aggregates in order to guide market expectations of interest rates and inflation. with the introduction of our new monetary policy concept six years ago, we took three specific measures in order to further enhance our transparency : • first, we have defined consumer price inflation of less than 2 % as our quantitative goal for price stability. this step has enhanced the predictability of our monetary policy because market participants know exactly what we want to achieve. they can expect monetary policy to be tightened if we believe that inflation could exceed 2 %. • as a second step, we now regularly publish a medium - term inflation forecast. this forecast helps market participants to predict future

once again fallen significantly, which will further dampen the inflation outlook for a time. however, lower oil prices will stimulate growth globally, and this will influence economic developments in switzerland positively. swiss franc exchange rate movements also impact inflation and the economic situation. the snb remains committed to its mandate of ensuring medium - term price stability while taking account of economic developments. in concluding, let me emphasise that the snb will continue to take account of the exchange rate situation in formulating its monetary policy in future. if necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions. thank you very much for your attention. i will now be happy to answer your questions. bis central bankers ’ speeches