Andréa M Maechler: Developments in Swiss and international financial and foreign exchange markets

Speech by Ms Andréa M Maechler, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 June 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I would like to start by outlining developments in the financial and foreign exchange markets. I will then make a few comments regarding the SNB policy rate and the replacement of Libor. Finally, I will provide some background information on the SNB's recent decision to join the Network for Greening the Financial System.

Financial and foreign exchange markets

In Q1 2019, the risk markets - especially the equity markets - recovered from the downturn in Q4 2018. This was partly due to the Federal Reserve signalling its willingness to be 'patient' on further interest rate hikes, and partly to the fact that economic data for Q1 2019 painted a more benign picture than the markets had expected at the end of 2018. In April, equity market indices briefly rose to new highs in several countries. In May and early June, many of these indices declined in response to a weaker economic and inflation outlook and, in particular, the abrupt escalation of the trade dispute between the US and major trading partners like China and Mexico. In aggregate, the major equity markets in North America and Europe have gained over 5% since the last news conference in December 2018.