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Swiss National Bank Chairman Hildebrand Resigns

January 9, 2012 by CentralBankNews   Comments (0)

The Swiss National Bank announced that Chairman, Philipp Hildebrand, "is resigning from his office as Chairman of the Governing Board of the Swiss National Bank" with immediate effect.  The SNB Governing Board also noted that it would continue its policy of a minimum exchange rate of CHF 1.20 against the Euro, with "utmost determination".  Hildebrand's resignation followed allegations that his wife had acted on insider information about an impending SNB policy move in regards to foreign exchange transactions.  Vice Chairman, Thomas Jordan, will hold the position of Chairman in the interim.

The Governing Board of the SNB noted Hildebrand's significant contributions and achievements in the field of monetary policy and his dedication and service to the Bank and Switzerland.  Hildebrand's tenure as SNB Chairman oversaw a number of key policy moves during a challenging time, for example moving to a zero interest rate policy, and the implementation of an exchange rate floor for the Swiss franc.

The Swiss franc (CHF) strengthened about 3% against the Euro last year, with the Swiss franc gaining as much as 17% at its strongest point on the back of safe-haven buying as concerns about the European sovereign debt crisis picked up in the later part of last year.  The EURCHF exchange rate last traded around 1.21 and USDCHF rate around 0.95.

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2012: a bank customer outlook

January 9, 2012 by skinnercm   Comments (0)

Some folks asked me to add a fourth outlook to my 2012 series regarding what customer focused trends would be occuring in 2012.


2012: McKinsey say banks need to reinvent themselves

January 9, 2012 by skinnercm   Comments (0)

Stumbled across an interesting report from McKinsey that says business as usual is not an option for American banks.  


Things worth reading: 9th January 2012

January 9, 2012 by skinnercm   Comments (0)

Things we're reading today include ...


The Finanser's Week: 19th December 2011 – 8th January 2012

January 8, 2012 by skinnercm   Comments (0)

Global Interest Rate Movements in 2011

January 7, 2012 by CentralBankNews   Comments (0)

This article reviews the monetary policy interest rate activity of the world's central banks during 2011.  The major theme of the year was monetary policy tightening, but the second half of the year featured many banks opting to reverse course or switch to outright net loosening.  Indeed of the 87 central banks that Central Bank News monitors, 34 made net increases to their interest rates, while 32 held their rates net unchanged, and 21 made net reductions to their policy interest rates, many of these in the second half of the year (see: Global Interest Rate Movements: Half-Year Review).

Of the central banks that net increased their interest rates, the average increase was 281 basis points (skewed up by Belarus; the average would be 185 excluding Belarus).  There were 18 central banks tightening by 100 or more basis points.  The outliers were Belarus 3450bps, Kenya 1200bps, and Uganda 1000bps.  Of those tightening rates, it was largely emerging and frontier markets, with inflation pressures running high on the back of rising food commodity prices and relatively buoyant economic conditions, particularly in the early part of the year.

There were relatively few central banks cutting interest rates, but of those that did, most made the move in the second half of the year as signs of slowing global growth started to show.  However the European sovereign debt crisis was perhaps the most poignant reason for loosening policy settings; with a few central banks opting to take a precautionary or preemptive move e.g. Australia.  The average interest rate cut among those to net-loosen monetary policy was 96 basis points.

So while the second half of the year saw increasing loosening of monetary policy, the major theme of the year in monetary policy was tightening.  Much of the policy tightening went on in emerging markets where inflation has been pushed above inflation targets due to rising global commodity prices and strong economic growth and activity levels (i.e. both demand pull and cost push).  The year also saw some non-conventional monetary policy moves (as noted in: Top 10 Most Extreme Monetary Policy Moves of 2011).

The course of monetary policy in 2012 will be highly dependent on the course of global growth, but especially the resolution or otherwise of the European sovereign debt crisis.  Though with signs that inflation is peaking in some of the key emerging markets, and slowing global trade, it is likely that the first half of 2012 will be dominated by monetary policy loosening.  At the same time, this could well turn to tightening in the second half; particularly as economies begin stabilize, policy stimulus flows through, and inflationary pressures begin to re-emerge. 

Whatever the course of interest rates in 2012, keep checking the website for regular and comprehensive global monetary policy updates.

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