In opening his speech, the Chairman of the Governing Board of the Swiss National Bank, Hans Meyer, gives a broad outline of global economic conditions and those in Switzerland. He then presents the National Bank's new monetary policy concept, which rests on three pillars: an explicit definition of price stability, a broad-based, medium-term inflation forecast, and a target range for the three-month Swiss franc money market rate which serves to implement monetary policy on an operative level.

The basic points of this new monetary concept are largely in line with both the philosophy and practice of other major central banks. They share our firm belief that the supply of money and price development are interconnected, we are also in agreement as to the importance of price stability and strive to include all the relevant indicators in our decision-making process.

Mr Meyer subsequently offers his views on the link between monetary policy and economic development and touches on Switzerland's integration into the European environment. For the time being, there is every reason to continue to be vigilant and to take seriously the potential threat of inflation. The chances are good that a mutual approach to a sustained policy of stability, and thus a tendency towards stable exchange rate relations, will emerge between Switzerland and the euro zone.