🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 2-SNB sees no reason to change policy-Jordan

Published 11/10/2009, 05:40 AM
Updated 11/10/2009, 05:42 AM

* Low interest rates pose risks for financial stability

* Also put price stability at risk

* Sees no reason to exit ultra-loose strategy yet

(Adds new comment from Jordan)

By Katie Reid and Albert Schmieder

ZURICH, Nov 10 (Reuters) - The Swiss National Bank sees no reason to exit its ultra-loose monetary policy at the moment, board member Thomas Jordan said, despite cautioning historically low interest rates pose risks to stability in the mid-term.

"We are following the same monetary policy as before and there is no reason to change this," Jordan told journalists on Tuesday.

Speaking earlier at a real estate congress in Zurich, Jordan said the SNB was aware historically low interest rates contained risks for both financial and price stability in the medium-term.

Another speech Jordan is due to give on Thursday may offer more clues as to the direction of the SNB's monetary policy ahead of its next policy-setting meeting on Dec. 10.

The SNB took a number of extraordinary measures to soften the impact of the worst economic downturn in decades on the Swiss economy, which is particularly vulnerable to weaker demand from abroad due to its dependence on exports.

The central bank cut its target for the 3-month Swiss franc LIBOR to 0.25 percent, offering cash in its daily operations at rates close to zero and bought corporate Swiss franc bonds.

It also intervened on the foreign exchange markets to stop the Swiss franc rising against the euro as it sought to fight deflation.

In addition it set up a fund, or StabFund, around a year ago, which allowed the country's beleaguered bank UBS to offload toxic assets from its balance sheet.

Jordan said in the speech the market for securitised instruments had improved, but many risks still remained and the environment for the assets in the StabFund was still challenging.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.