jean - pierre roth : recent financial and economic developments in switzerland introductory remarks by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the half - yearly media news conference, geneva, 17 june 2004. * * * the economy has developed in line with the expectations expressed in our monetary policy assessments of december and march. the economic recovery has increasingly gained hold in switzerland and abroad and has become broader - based. against this backdrop, we have reached the conclusion that the time has come for a slight tightening of monetary policy. the target range for the three - month libor is being raised by 25 basis points with immediate effect and the libor is being kept around 0. 5 %. this move reverses half of the latest interest rate cut of 6 march 2003 ; then the threemonth libor was reduced from 0. 75 % to a historic low of 0. 25 % due to fears of deflation and the appreciation of the swiss franc at that time. the interest rate range extends from 0. 0 % to 1. 0 %. even after this adjustment our monetary policy will remain expansionary and continue to support the economic upswing. let me offer some comments on our decision and the outlook for prices as summarised in the new inflation forecast. the graph provides you with the current and the last inflation forecasts. the dashdotted green curve is the march forecast, which presupposes that the three - month libor rate would remain unchanged at 0. 25 % in the next three years. as the graph shows, inflation in the first quarter developed as predicted by us ( blue curve ). the dashed red curve represents the new forecast. this is based on a steady three - month libor of 0. 5 %. the forecast begins in the second quarter of the current year and ends in the first quarter of 2007. in order to analyse the inflation prospects, it is useful to differentiate three phases. i shall begin with the short - term inflation prospects. in particular, i shall discuss the role of oil prices. then i will present our outlook for the economy, which affects the medium - term inflation forecast. finally, i shall talk about the long - term inflation prospects. for this, an analysis of monetary developments is helpful. the development of oil prices in the short term, i. e. for a period of approximately one year, monetary policy can hardly steer price developments. price levels are largely determined by monetary policy decisions made

elements of a strong customer bank relationship is the bank ’ s understanding of customer needs and preferences. however, with the massive increase in their size and their customer base, the banks have slowly drifted away from understanding their customers ’ needs and preferences closely. further, the proliferation of alternate delivery channels has necessitated that banks build their presence across all channels ( omni - channel presence ) to offer their services to their customers. as the banks can ’ t probably dictate that their customers chose specific channel, the challenges for the banks is to design products / systems which are channel / segment agnostic. bis central bankers ’ speeches 32. while retail banking offers phenomenal opportunities for growth, the challenges are equally daunting. the exacting regulatory requirements on the consumer protection front, risks from a slowing global economy and increasing customer expectations mean that banks must innovate to grow. how far the mass retail banking of the future would be able to fulfil its socio - economic objectives would in a large measure depend upon the willingness of the banks to innovate and reform their business processes and structures for this cause. it is in the banks ’ own interest to be alive to the customers ’ interests ; else they might have to face stiff regulatory sanctions. post crisis, several jurisdictions in the developed world have seen public demands for ethical pricing. in this facebook and twitter age, the banks cannot remain oblivious to the power of the social media which wields enough clout to forcibly reform the outliers through negative publicity. only such retail banks, who inculcate ability to churn out innovative and differentiated products by harnessing cutting - edge technology, greatly improve their productivity and efficiency, bring a fair, transparent and nondiscriminatory pricing and demonstrate a commitment towards fair treatment to their customers, would be able to survive and add value to the society. 33. i once again thank ms. thorat and cafral for inviting me to this roundtable and giving me an opportunity to share my perspectives on a very topical subject for the banks as well as the regulators and policy makers. i hope that over the course of next two days as you deliberate on the nuances of retail banking, you would reflect on some of the issues that i have raised in my address today. i wish the roundtable all success. thank you! bis central bankers ’ speeches