a further monetary policy easing. in view of the limited size of the domestic capital market compared to other countries, foreign currency purchases seemed the most appropriate course of action for switzerland. this allowed for the absorption of extreme exchange rate developments, which could have triggered a deflationary dynamic. in absorbing the upward pressure on the swiss franc, the snb may have taken on a higher balance sheet risk, however, in doing so, it countered the risk of a deflationary trend. although the swiss franc has appreciated sharply since the beginning of the year, the deflation threat has declined as the economic recovery has strengthened. the appreciation of the swiss franc has impaired the competitive position of swiss exporters. however, the negative impact on export demand has been reduced by robust economic growth in the economies importing switzerland ’ s goods and services. chart of conditional inflation forecast i would now like to comment on the new, conditional inflation forecast in more detail. the ( dashed ) red curve on the chart represents the new, conditional inflation forecast. it shows the future path of inflation, assuming that the three - month libor remains constant at 0. 25 % over the entire forecast horizon, and it covers the period from the fourth quarter of 2010 to the third quarter of 2013. for purposes of comparison, the ( dash - dotted ) green curve shows the inflation forecast published in september, which was also based on the assumption of a three - month libor of 0. 25 %. the new conditional forecast shows that inflation remains low for 2011 and 2012. the forecast for the next few quarters is revised because new data has been taken into account. the new forecast for 2011 is slightly above that published in september because the oil price has increased. the increase in inflation in the third quarter of 2011 is attributable to a base effect, because inflation in the third quarter of 2010 was comparatively low. compared to the forecast published in september, inflation in 2012 and 2013 rises less steeply, particularly due to the fact that the economic outlook for europe is less favourable than in the previous quarter. towards the end of the forecast horizon, inflation rises briskly and exceeds the upper bound of 2 %, assuming that the three - month libor remains at the current level. this shows that the current expansionary monetary policy cannot be pursued for the entire forecast horizon without compromising long - term price stability. due to the risks mentioned previously, this forecast is associated with a very high level of uncertainty.

banks involved is essential. in addition, the national bank is considering cooperating with private sector auditors. in the same way as the fbc, which works with private - sector auditors in conducting its supervisory activities, the national bank intends to use a dual system in which certain examinations may be carried out by private auditing companies. there is a particular need for such an approach in those areas in which very specific specialist knowledge is required, such as in the assessment of information security. concluding remarks two further points in conclusion : firstly, it must be emphasised that the oversight of payment and securities settlement systems is a new task for the national bank only where securities settlement is concerned. as the bank of banks, it already helps to shape financial market infrastructures and limit the systemic risks inherent in them. in both segments, however, the new law gives the national bank a more forceful range of instruments that will allow it to act more effectively and more transparently. secondly, it would be wrong to assume that the explicit mandating of the national bank to oversee payment and securities settlement systems is in response to any fundamental concerns about the reliability of switzerland ’ s financial market infrastructures. on the contrary - we believe that the swiss financial centre has infrastructures that function better than most and come out very well in an international comparison of security and efficiency. by overseeing payment and securities settlement systems, the national bank is helping to ensure that it will remain so in the future.