- Thomas Jordan, Swiss National Bank President
While several central bankers are keen to highlight that stimulus that monetary policy can provide are limitless, Swiss National Bank President Thomas Jordan disagrees with this view. Mr. Jordan stressed that unconventional measures cannot be used endlessly to achieve desirable monetary conditions. Central banks cannot cut interest rates infinitely without risking fuelling a flight to cash. Mr. Jordan added that policy makers should continuously assess the effects of their monetary policies, which are likely to weaken over time. If instruments are no longer providing the desired effect, monetary policy should be reconsidered. Mr. Jordan concluded that monetary policy cannot cushion the fallout of every negative development in the world's economy or international financial markets. Mr. Jordan reiterated that the Swiss Franc remains overvalued to the Euro, adding that the SNB stands ready to intervene on the forex market if needed, as the strong Franc continued to hurt Swiss exporters and retailers.
Mr. Jordan admitted that the ECB's decisions were of "utmost interest" to the SNB as they strongly affect Switzerland. The ECB is expected to reduce its –0.30% deposit rate when it meets on March 10. If the move results in a significant weakening of the Euro, the SNB could come under pressure to cut its own –0.75% deposit rate in an attempt to weaken the Franc.
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