The National Bank implemented a new monetary policy concept about three years ago. How has this concept fared in practice? Experiences have been altogether positive. In applying this concept, the National Bank has demonstrated a capacity to act and to pursue a flexible monetary policy. The concept has been well received by the Swiss public, and the major international organisations commented favourably on it.

What are the monetary policy challenges faced by the National Bank today? It has lowered interest rates substantially in a time of difficult economic conditions. It is assisting an economic recovery without jeopardising price stability in the medium term. Should the economic situation continue to deteriorate, the National Bank would have to employ other instruments to bring about a further easing of monetary policy. In a crisis situation, intervention on the foreign exchange market would be the National Bank's most potent weapon.