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The implementation of SNB monetary policy


Ranaldo, Angelo; Jordan, Thomas; Söderlind, Paul (2009). The implementation of SNB monetary policy. Financial markets and portfolio management, 23(4):349-359.

Abstract

We use a regime-switching approach to model the implementation of SNB monetary policy. The regime-switching technique is crucial for assessing the flexibility inherent in the SNB’s monetary policy strategy. 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 intended effects in periods of distress. Another significant contribution also comes from some new measures designed to improve liquidity in the Swiss franc money market during the financial crisis of 2007–2008.

Abstract

We use a regime-switching approach to model the implementation of SNB monetary policy. The regime-switching technique is crucial for assessing the flexibility inherent in the SNB’s monetary policy strategy. 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 intended effects in periods of distress. Another significant contribution also comes from some new measures designed to improve liquidity in the Swiss franc money market during the financial crisis of 2007–2008.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Accounting
Social Sciences & Humanities > Finance
Scope:Discipline-based scholarship (basic research)
Language:English
Date:13 October 2009
Deposited On:24 Aug 2023 12:30
Last Modified:30 Mar 2024 04:33
Publisher:Springer
ISSN:1934-4554
OA Status:Green
Publisher DOI:https://doi.org/10.1007/s11408-009-0118-x
Other Identification Number:merlin-id:5925
  • Content: Accepted Version
  • Language: English