thomas jordan : price and financial stability - a demanding year for the swiss national bank speech by mr thomas jordan, chairman of the governing board of the swiss national bank, at the 115th ordinary general meeting of shareholders of the swiss national bank, berne, 28 april 2023. * * * madam president of the bank council dear shareholders dear guests it is a pleasure for me to welcome you to our general meeting today. i see many familiar faces, but also a large number of new shareholders. a warm welcome to you all. i am delighted that so many of you have responded to our invitation. we are living in extremely turbulent times. our last general meeting was marked by russia's invasion of ukraine, and the general meetings in the previous two years by the coronavirus pandemic. this year we have witnessed a shock to the swiss financial sector, namely the crisis at credit suisse and the takeover of the bank by ubs. today, i would like to give you some more detailed information about the role of the swiss national bank in managing this latest crisis. i will also set out how we have been combating inflation with our monetary policy since the last general meeting. let me start with the second topic. tighter monetary policy to ensure price stability the snb is obliged by constitution and statute to pursue a monetary policy that serves the interests of the country as a whole. our task is to ensure price stability and, in so doing, to take due account of economic developments. stable prices benefit society across the board. inflation unsettles households and businesses, which can lead to costly mistakes when it comes to purchasing and investment decisions. but above all, price stability protects lower - income households, which are most exposed to the inflation - induced erosion of purchasing power. we equate price stability with a rise in consumer prices of between 0 % and 2 % per year. however, for over a year now, inflation in switzerland has exceeded this range ; it was 3. 2 % in the first quarter of 2023. inflation has risen even more sharply abroad. it reached a high of 9. 1 % last year in the us, and as much as 10. 6 % in the euro area. there are a number of reasons why inflation has risen globally in recent quarters. higher energy prices and supply bottlenecks caused by the pandemic and the war in ukraine were major drivers. but the strong increase in demand due to catch - up effects and expansionary monetary and fiscal policy

mr. stals discusses monetary policy challenges in south africa address by the governor of the south african reserve bank, dr. chris stals, at a south african financial markets conference arranged by standard bank of south africa limited in cape town, on 7 / 11 / 97. 1. challenge number one - to find consensus on what the objective of monetary policy should be in south africa in the international community of central bankers, there is widespread consensus that the primary goal of monetary policy must be domestic price stability. price stability, however, is only a means to an end, and not a final goal of overall macroeconomic policy. the ultimate goal is determined by governments and is normally linked to the objective of maximum economic growth, development and the creation of more employment opportunities. contemporary economic theory supports the view, however, that financial stability, as measured by a low rate of inflation, is a precondition for the attainment of optimum economic development. furthermore, monetary policy, being only one of the sub - elements of overall macroeconomic policy, is tasked with the responsibility to create and maintain such a stable financial environment that will be conducive for sustainable economic growth at an optimum rate in the medium and longer term. in south africa, however, confusion remains on what the task and the functions of the central bank should be. the most important delusion, supported by certain business people, politicians and even some academics, is linked to the now defunct phillips curve approach in terms of which the assumption is made that a higher inflation rate can produce a sustained lift in growth and employment. world - wide experience, as long back as in the 1970s, provided sufficient evidence that the assumed trade - off of higher inflation for lower unemployment could only be exploited over the limited period in which inflation expectations did not fully adjust to the new higher rate of inflation. with a more effective implementation of the theory of rational expectations within modern communities, this limited period has indeed become very short. another reason why the conventional theory of demand management through the application of monetary policy is no longer appropriate is the major shift that took place in recent years in macroeconomic management, away from conventional keynesian demand management to contemporary supply - side economics. the phillips curve approach is based on the theory of demand - driven inflationary or deflationary conditions. the world - wide situation in the 1970s, when there was a simultaneous rise in inflation and in unemployment in many of the industrial countries, refuted the theory of the trade - off and forced