by With its annual report from a few weeks ago the SNB communicated minor changes in its monetary policy strategy (p. 24): The review of the monetary policy strategy showed that it has fundamentally proved its worth. There was no need to adjust the first two elements, namely the definition of price stability and the conditional inflation forecast. The strategy has enabled the SNB to fulfil its mandate of price stability well, despite repeated strong external shocks in recent years. The definition of price stability has allowed the SNB to react flexibly to such shocks and to weigh up the costs and benefits of monetary policy measures. The conditional inflation forecast has also proved its worth as the main indicator for the orientation of monetary policy and as a tool for its
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With its annual report from a few weeks ago the SNB communicated minor changes in its monetary policy strategy (p. 24):
The review of the monetary policy strategy showed that it has fundamentally proved its worth. There was no need to adjust the first two elements, namely the definition of price stability and the conditional inflation forecast. The strategy has enabled the SNB to fulfil its mandate of price stability well, despite repeated strong external shocks in recent years. The definition of price stability has allowed the SNB to react flexibly to such shocks and to weigh up the costs and benefits of monetary policy measures. The conditional inflation forecast has also proved its worth as the main indicator for the orientation of monetary policy and as a tool for its communication. It summarises the need for monetary policy action and helps to communicate monetary policy decisions in an understandable manner.
The formulation of the third element, however, has been adjusted. The SNB implements its monetary policy by setting the SNB policy rate. The third element now explicitly provides for the SNB to also use additional monetary policy measures to influence the exchange rate or the interest rate level, if necessary. With this adjustment, the SNB is taking into account the increased importance of such measures in recent years. Until now they have been mentioned in explaining the strategy, but were not explicitly included in the third element.
As part of this review, the SNB also decided to hold a news conference following every monetary policy assessment, in order to explain the monetary policy decision to the public in greater detail. This change was implemented for the first time at the September assessment.
In my NZZ article from August 2021 I had concluded (in German):
Daher ist eine Strategieüberprüfung inner- und ausserhalb der SNB sinnvoll. Geldpolitisch prüfenswert sind das Inflationszielband, die Zentralität des Zinsinstruments und die Kommunikation. Die Glaubwürdigkeit der SNB verbietet ein Auseinanderklaffen von Theorie und Praxis, aber auch allzu häufiges und detailversessenes Feilen an der Strategie, und sie verlangt Konzentration auf das Wesentliche. Gleichzeitig sollte die SNB ihre Bindung an den – gegebenenfalls sich wandelnden – Willen des Gesetzgebers betonen. Bei Fragen, die nicht allein in ihre Zuständigkeit fallen, muss sie klarstellen, dass sie Partei und nicht Schiedsrichterin ist. Damit die SNB auch in Zukunft zu den grossen Schweizer Erfolgsgeschichten zählt, muss sie von Zeit zu Zeit über die Bücher gehen. Doch alleine kann sie die Verantwortung in Geld- und Währungsfragen nicht tragen.
The title of that article was “Die Nationalbank ist an vielen Fronten gefordert”. Online, the NZZ added “—die Schweizerische Nationalbank braucht eine neue Strategie”.