Andréa M Maechler: Introductory remarks, Swiss National Bank news conference

Introductory remarks 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, 18 June 2020.

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

I will begin my remarks with a review of developments on the financial markets over the last half-year. I will then discuss the operational implementation of the SNB's COVID-19 refinancing facility and explain the flexible set-up of this new mechanism, which we put in place extremely quickly. Finally, I would like to inform you about some of the latest developments on the Swiss franc money market.

Situation on the financial markets

Over the last six months, activity on the financial markets has been heavily influenced by the crisis surrounding coronavirus (COVID-19). After a positive start to the year, the major stock markets in Europe and the US were still posting record highs in mid-February and volatility was historically low in some markets. However, the situation changed abruptly at the end of February due to the global spread of COVID-19 and the associated containment measures. Investors' risk sentiment buckled in response to these developments. Within a very short space of time, the stock markets had recorded losses on a scale last seen during the 2008 global financial crisis. In addition to this, prices on the oil market fell dramatically at the beginning of March. Under these conditions, safe assets were highly sought after. Yields on highly rated, longer-term government bonds fell sharply, reaching all-time lows in some countries in early March. There was strong demand on the foreign exchange markets for safe-haven currencies such as the US dollar, the Japanese yen and the Swiss franc.