3504570: After-Work Lecture: Monetary Policy after the Financial Crisis - A World of Low Interest Rates

Description

Since the financial and economic crisis, central banks all over the world have pursued expansionary monetary policies. The Swiss National Bank (SNB) is no exception. When interest rates reached the zero lower bound, unconventional measures were adopted to further relax monetary conditions. These measures mainly took the form of foreign exchange interventions to stabilize the Swiss franc against the euro. On 6 September 2011 the SNB finally set a minimum exchange rate against the euro.

Conventional and unconventional measures taken by central banks have helped to prevent the global economy from drifting into deflation and depression. However, the expansionary global monetary policy is also associated with a number of risks. In this context risks for financial stability from unsustainable developments in the real estate sector are discussed. Though liquidity has been increased substantially, the maintenance of long-term price stability remains essential for monetary policy.