expected rate of – 0. 8 %. the inflation rate should re - enter positive territory in 2017. as in past years, the economic outlook is fraught with a number of different risks. this applies to the euro area, to the us and to emerging economies. the international financial markets are characterised by uncertainty, which in turn can have adverse effects on the global economy. and last but not least, there are considerable political risks in europe and beyond. in this difficult environment, we will continue to deploy the instruments available to us to ensure price stability in switzerland in the medium term. even though we have already gone a long way with negative interest and our willingness to intervene in the markets, there is still room for manoeuvre in our monetary policy. ideas for switzerland : sovereign wealth fund and sovereign money initiatives i would now like to turn in the second part of my speech to the sovereign wealth fund and sovereign money initiatives. the events of recent years have given cause for reflection on the financial system and the role of central banks. as the president of the bank council has already described, we welcome such discussions. they enhance the public ’ s understanding of what central banks do and why they do it. sovereign wealth fund the snb ’ s balance sheet has expanded sharply since 2008. it is this growth that inspired the idea to set up a sovereign wealth fund to manage the snb ’ s foreign exchange reserves. a number of different options are being proposed for the structure of the sovereign wealth fund. although proponents ’ goals differ quite considerably, they all draw parallels with the sovereign wealth funds of countries such as norway. however, comparisons with norway are misleading, since this country supplies its sovereign wealth fund with tax revenues, licence fees and dividends from the oil sector. when companies in a country discover new natural resources, the country becomes richer as a result of the revenue generated and its wealth increases. by contrast, the exceptional growth in the snb ’ s balance sheet since 2008 is primarily attributable to foreign currency purchases based on monetary policy considerations. we bought foreign currency in order to limit the appreciation of our own currency, thereby putting more swiss francs into circulation. such an expansion of the money supply, however, does not create any real value. this difference between oil revenues and foreign exchange reserves is important when contemplating setting up a sovereign wealth fund. norway is able to transfer oil - sector tax revenue and other receipts into its sovereign wealth fund, because they constitute profit for the country as a whole

implementation aid with a much shorter time reach relative to the formerly used money supply target. it must be frequently adjusted in response to various changes and new information so as to enable the stability goal to be reached. against the background of our knowledge of the monetary policy transmission process and its lag structure, it is obvious that it is hardly the level of money market rates that is decisive, but rather the interest rate path optimised over time in uncertain circumstances. the condition for success of the policy is not that the three - month libor rate is exactly right today ; rather, it must be possible to constantly optimise the interest rate path - which leads to the set goal - in a way that the deviations of the ideal line, which can only be defined ex post, will be as small as possible and easy to correct. interest rate steering will therefore often follow a fairly gradualistic pattern. this has nothing to do with macroeconomic activism, quite the contrary. the macroeconomic fine - tuning activists have lost their case because they have assumed totally unrealistic information conditions and underestimated the uncertainty of political decision - making. with interest rate steering, the situation is exactly the opposite. precisely where there is considerable uncertainty and false steps are liable to occur, there are good reasons for implementing a policy of small steps. the danger of slipping is smaller, and a false step is easier to correct. but there are also valid grounds for fairly substantial interest rate adjustments. for one thing, it may well happen that policymakers, in the light of new facts and figures on ongoing developments, come to the conclusion that the interest rate pattern currently followed needs to be corrected quite considerably. this would mean correcting a pattern that, from today ’ s vantage point, was not optimal in the past. for another, it may be desirable in certain situations to take the markets by surprise and cause expectations to be revised. second, it is in the nature of the concept that the information content of a pre - announced interest rate target is much smaller with respect to the time dimension than used to be the case for money supply targets. under the aspects of transparency and central bank accountability, this is a drawback. we have therefore taken effective countermeasures by defining price stability and deciding to publish our inflation forecast, thus submitting our decisions to public discussion. this has made it clear - and equally clearly communicated - how our actions are oriented and how they are to be measured. i have thus addressed issues that