Andréa M Maechler: Climate risks and central banks - an SNB perspective

Speech by Ms Andréa M Maechler, Member of the Governing Board of the Swiss National Bank, and Mr Thomas Moser, Alternate Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Geneva, 14 November 2019.

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

Ladies and Gentlemen

I wish you a warm welcome to the Swiss National Bank's second Money Market Event in 2019.

The SNB's monetary policy continues to evolve in a particularly dynamic context. The global growth outlook is clouded by considerable uncertainty - principally of a political, geopolitical and economic nature. This general environment is reflected in the Economic Policy Uncertainty Index developed by Baker, Bloom and Davis. As you can see in chart 1, this index hit a new high in August 2019. The level of uncertainty captured in the index is currently almost three times above its historical average. Among other things, this context has exerted strong downward pressure on long-term interest rates - indeed, this pressure has been stronger than macroeconomic indicators have suggested in recent months.

Our monetary policy has to navigate these obstacles in order to ensure appropriate monetary conditions for the Swiss economy. At our September monetary policy assessment, we decided to leave our expansionary monetary policy stance unchanged. The SNB policy rate is unchanged at -0.75% and we remain willing to intervene in the foreign exchange market as necessary.