Michel Camdessus Lecture Series: Managing Director’s Opening Remarks Introduction of Thomas J. Jordan
IMF News, July 14, 2020
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- Authors: Kristalina Georgieva
- Published: July 14, 2020
Context and purpose
- Occasion: seventh Michel Camdessus Lecture—signature lecture series on the role of central banks.
- Format: first-ever virtual Camdessus Lecture.
- Speaker introduced: Thomas J. Jordan, Chairman of the Governing Board of the Swiss National Bank (SNB).
- Remarks delivered by Kristalina Georgieva, IMF Managing Director, Washington, DC, July 14, 2020.
1. Unprecedented times
- The world is facing a crisis characterized as “more severe and more complex than anything we have seen in living memory.”
- Emphasis on supporting those most affected and adapting and rethinking lives and economies.
- Original theme planned in January: “lower-for-longer” interest rate environment; crisis likely to make it “lower for even longer.”
- Reference to a related event: Advances in Monetary Economics conference organized by the IMF’s Monetary and Capital Markets Department and the Research Department.
2. Monetary policy in uncharted territory
- IMF macro projection highlighted:
- Global growth forecast: -4.9 percent in 2020.
- Projection: only a partial recovery in 2021.
- Recognition that extraordinary fiscal and monetary measures by governments and central banks have “placed a floor under the global economy,” but the recovery is incomplete: “we are not out of the woods.”
- Key questions raised for monetary policymakers:
- How can central banks best support the economy once they have exhausted conventional policy space?
- How can central banks avoid unintended consequences, such as asset markets that may become detached from economic fundamentals?
- What other instruments are in the toolbox if circumstances become even more challenging?
- How will higher debt levels and weaker balance sheets affect demand for credit, the natural rate of interest, and the conduct of monetary policy going forward?
- What will be the impact of ‘lower for longer’ on financial stability—both domestically and externally via spillovers?
- Recognition of the role of pioneers of unconventional approaches, including Thomas Jordan and the SNB.
3. Redesigning monetary policy: Switzerland’s experience
- Switzerland characterized as a small open economy frequently affected by external shocks; policymakers have responded with creativity and resolve.
- SNB actions cited:
- 2011: introduced an exchange rate floor during the European sovereign debt crisis to help safeguard the economy.[1]
- 2015: introduced a negative interest rate policy to deal with deflationary pressures—a policy that “remains in place to this day.”
- Leadership and institutional links:
- Thomas Jordan: served on the SNB Governing Board since 2007; appointed Chairman of the Governing Board in 2012.
- SNB Governing Board colleagues: Fritz Zurbrügg and Andréa Maechler (both previously served in senior positions at the IMF).
- Cooperation and policy contributions:
- Thanks expressed to Swiss authorities, the SNB, and Thomas for engagement with the IMF, including financial support for regular and concessional lending resources, debt relief, and capacity development efforts in the Caucasus and Central Asia region.
- Thomas’ post-global financial crisis work with other policymakers to draw up new capital standards for systemic banks; stronger buffers credited with benefiting economies in the current crisis.
- SNB’s contributions to integrating climate risk into banking supervision, including joining the Network for Greening the Financial System (NGFS) in April 2019.[2]
4. Personal note and invitation
- Personal attribute: Thomas Jordan’s background includes excelling at water polo, highlighted as demonstrating agility, situational awareness, creative game plans, and team leadership—qualities linked to his career.
- Purpose of the lecture: to hear Thomas Jordan’s insights on monetary policy in difficult times and lessons from Switzerland’s experience, followed by a conversation about major challenges facing central banks.
- Closing: Kristalina Georgieva formally invites Thomas Jordan to deliver the Michel Camdessus Lecture: “The floor is yours.”
Source: Michel Camdessus Lecture Series: Managing Director’s Opening Remarks Introduction of Thomas J. Jordan — By Kristalina Georgieva, IMF Managing Director, Washington, DC, July 14, 2020.