Switzerland's approach to monetary policy

Monetary policy as conducted by the Swiss National Bank is aimed at maintaining price stability in the medium term. Between 1980 and 1999, the Bank used the seasonally adjusted monetary base as monetary target and as indicator. Given the continually distorted indicator value of the monetary base aft...

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Bibliographic Details
Published in:New England economic review 2002-01, p.57
Main Author: Olivei, Giovanni P
Format: Article
Language:English
Subjects:
Bank portfolios
Bank reserves
Banking industry
Banking law
Budgets
Central banks
Collateral
Deposit banking
Economic development
Economic indicators
Economic policy
Fiscal policy
Foreign exchange markets
Inflation
Inflation rates
International organizations
Investment policy
Loans
Monetary policy
Money markets
National banks
Objectives
Price stabilization
Switzerland
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Summary:Monetary policy as conducted by the Swiss National Bank is aimed at maintaining price stability in the medium term. Between 1980 and 1999, the Bank used the seasonally adjusted monetary base as monetary target and as indicator. Given the continually distorted indicator value of the monetary base after 1996, the Bank fundamentally reviewed its modus operandi. As of the beginning of 2000, the Swiss National Bank considers price stability to be achieved with an annual inflation rate of less than 2%. The Bank bases its monetary policy decisions on a medium-term inflation forecast. Despite similarities to inflation targeting, the new framework differs from it on one important aspect, namely, it does not contain an institutional commitment to an inflation target as the overriding objective of monetary policy.
ISSN:0028-4726
2163-5986