The Implementation of SNB Monetary Policy

Thomas Jordan, Angelo Ranaldo and Paul Söderlind

University of St. Gallen Department of Economics working paper series 2009 from Department of Economics, University of St. Gallen

Abstract: We use a regime switching approach to model the implementation of the SNB monetary policy. The regime switching technique is crucial to assess the flexibility inherent in the SNB's monetary policy concept. The empirical findings support the idea that repo operations are instrumental in smoothing the implementation of monetary policy in normal times while changes in the official operational target accompanied by the accommodating use of repo operations produce the aimed effects in distressed periods. A significant contribution also came from some new measures designed to improve liquidity in the Swiss franc money market during the financial crisis in 2007- 8.

Keywords: implementation of monetary policy; Libor; repo; Swiss franc money market; regime switching model (search for similar items in EconPapers)
JEL-codes: E5 G15 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2009-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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