various provisions to ensure such transparency along with the principal policy objective, which, as mentioned, is to contribute to the sound development of the national economy by maintaining price stability. furthermore, to ensure that monetary policy is consistent with the government's basic economic policy framework, the law states that the bank should always maintain close contact and exchange views with the government. as i will discuss later, the law also allows representatives of the government to attend mpms to give their views. now for the second point, namely the decision of monetary policy by a committee, or a policy board. at the opposite extreme to this system is the framework in which the final decision is entrusted to the central bank governor, and some central banks maintain this system. however, the majority of central banks currently make use of the system where a committee or members of a board decide monetary policy. the bank's policy decisions are made through a majority vote of the nine members of the policy board, which i believe is an excellent method. this makes it possible for policy board members, who share the common objective of contributing to the sound development of the national economy through price stability, to reach the right decisions based on the pool of knowledge and learning of the constituent members. it makes for better decisions and contributes to satisfactory conduct of monetary policy. iii. what are mpms? a. the framework of mpms the policy board, which is the bank's highest decision - making body, discusses a wide range of matters related to the bank's policy and business operations. matters related to monetary policy - such as the official discount rate, guidelines and tools for money market operations, and the bank's assessment of economic and financial developments - are discussed in mpms. by statute, the procedures for mpms differ from those of regular policy board meetings. the most important item on the agenda at mpms is deciding on a policy guideline for money market operations for the intermeeting period ahead. for example, the current guideline for money market operations under the quantitative easing policy framework is as follows : " the bank of japan will conduct money market operations, aiming at the outstanding balance of current accounts held at the bank at around 15 to 20 trillion yen. " the policy board also determines at mpms the financial assets the bank should purchase or accept as eligible collateral. for example, it decided to accept as collateral asset - backed securities ( abs ) and asset - backed commercial paper ( abcp ), for which there is recently an

thomas jordan : monetary policy in a climate of increased uncertainty summary of a speech by mr thomas jordan, member of the governing board of the swiss national bank, at the snb money market event, geneva, 1 november 2007. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * uncertainty about the extent and distribution of losses from us “ subprime ” mortgages has resulted in a marked squeeze on financial markets. in particular, there is considerable uncertainty concerning the true valuation of securitised assets and structured products based on subprime mortgages. demand for liquidity has surged. in certain instances, the crisis of confidence among financial market participants was so pronounced that some markets did not function at all. the “ re - pricing of risk ” has caused risk premia for most financial instruments to soar. risk premia are important for the swiss national bank ( snb ) for two reasons. on the one hand, they act as economic signals and should therefore be as unbiased as possible in the way they reflect underlying risks. in addition, there are certain risks attached to extreme values of risk premia. abrupt and uncontrolled corrections could lead to instability on financial markets and interfere with their smooth functioning. on the other hand, risk premia affect the restrictiveness of monetary policy. an increase in such premia tightens monetary policy. the snb monetary policy concept, where the three - month libor is at the centre of the implementation of monetary policy, takes systematic account of changes in risk premia.