meltzer, 2003 ). thus monetary policy was not in fact easy at all, despite the very low level of nominal interest rates. in any event, fed officials convinced themselves that the policy ease advocated by the congress was not appropriate, and so when the congress adjourned in july 1932, the fed reversed the policy. by the latter part of the year, the economy had relapsed dramatically. the fourth and final policy mistake emphasized by friedman and schwartz was the fed's ongoing neglect of problems in the u. s. banking sector. as i have already described, the banking sector faced enormous pressure during the early 1930s. as depositor fears about the health of banks grew, runs on banks became increasingly common. a series of banking panics spread across the country, often affecting all the banks in a major city or even an entire region of the country. between december 1930 and march 1933, when president roosevelt declared a “ banking holiday ” that shut down the entire u. s. banking system, about half of u. s. banks either closed or merged with other banks. surviving banks, rather than expanding their deposits and loans to replace those of the banks lost to panics, retrenched sharply. the banking crisis had highly detrimental effects on the broader economy. friedman and schwartz emphasized the effects of bank failures on the money supply. because bank deposits are a form of money, the closing of many banks greatly exacerbated the decline in the money supply. moreover, afraid to leave their funds in banks, people hoarded cash, for example by burying their savings in coffee cans in the back yard. hoarding effectively removed money from circulation, adding further to the deflationary pressures. moreover, as i emphasized in early research of my own ( bernanke, 1983 ), the virtual shutting down of the u. s. banking system also deprived the economy of an important source of credit and other services normally provided by banks. the federal reserve had the power at least to ameliorate the problems of the banks. for example, the fed could have been more aggressive in lending cash to banks ( taking their loans and other investments as collateral ), or it could have simply put more cash in circulation. either action would have made it easier for banks to obtain the cash necessary to pay off depositors, which might have stopped bank runs before they resulted in bank closings and failures. indeed, a central element of the federal reserve's original mission had been to

weighed up before a final decision about longer - term monetary policy implementation can be made. concluding remarks this brings me to the end of my remarks. let me summarise my main points. our first experiences suggest that our new approach to implementing monetary policy has succeeded in steering saron and in ensuring the pass - through of the snb policy rate to other money market segments and longer - term interest rates. at the same time, trading in the interbank money market has remained robust. snb reverse repos and snb bills have proved effective in absorbing reserves and have integrated well into the universe of money market instruments. with our current approach, we were able to implement monetary policy effectively even in the face of rapidly changing market conditions, such as those that prevailed during the crisis at credit suisse. in closing let me reiterate that for most central banks it is still undecided which monetary policy implementation approach – a floor system or a corridor system – will be adopted in the longer term. the decision will depend on an array of factors, but especially on the answers to the questions i have raised in my remarks. in any case, the snb ’ s balance sheet will continue to primarily reflect the snb ’ s monetary policy activities. it results from the fulfilment of the snb ’ s mandate to ensure price stability while taking due account of economic developments. page 9 / 10 references afonso, g., logan, l., martin, a., riordan, w. and zobel, p. ( 2022 ), how the federal reserve ’ s monetary policy implementation framework has evolved, federal reserve bank of new york liberty street economics, 10 january. bank of england ( 2022 ), managing the operational implications of apf unwind for asset sales, control of short - term market interest rates and the bank of england ’ s balance sheet, bank of england explanatory note, 4 august. borio, c. ( 2023 ), getting up from the floor, bis working papers, no. 1100, may. federal reserve board ( 2019 ), statement regarding monetary policy implementation, press release, 11 october. hauser, a. ( 2023 ), ‘ less is more ’ or ‘ less is a bore ’? re - calibrating the role of central bank reserves, kings college london ’ s bank of england watchers ’ conference, 3 november. maechler, a. and moser, t