Switzerland: 2012 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; Statement by the Executive Director for Switzerland
May 8, 2012
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This Article IV Consultation reports that Switzerland’s exchange rate floor, seen as credible by the markets, has halted appreciation and helped shore up the economy. Once growth recovers and inflation reaches more comfortable levels, maintaining the exchange rate commitment risks stoking inflation and hence, a return to free floating would be desirable. The risk of a real estate bubble has been heightened by loose monetary conditions, and new macroprudential instruments are under consideration to address this risk.
Subject: Banking, Exchange rates, Financial institutions, Fiscal policy, Fiscal rules, Foreign exchange, Inflation, Insurance companies, Mortgages, Prices
Keywords: appreciation, authority, Basel III counter-cyclical capital buffer, candid policy recommendation, commitment risk, CR, crisis, exchange rate appreciation, exchange rate floor, Exchange rates, Fiscal rules, Global, Inflation, inflation outlook, Insurance companies, ISCR, Mortgages, policies-safeguarding credibility, policy, policy option, risk
Pages:
56
Volume:
2012
DOI:
Issue:
106
Series:
Country Report No. 2012/106
Stock No:
1CHEEA2012001
ISBN:
9781475503395
ISSN:
1934-7685
