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“Without independence, there is no free research and no monetary policy protected from special interests,” Jordan emphasized in his speech. “But independence is neither a natural law nor a given.”
For Jordan, maintaining independence depends on three points. First, independence will need to be effectively implemented in the SNB. For the SNB, this means “always directing monetary policy towards maintaining price stability”.
Secondly, it is important to be accountable for what the SNB regularly does to the Bundestag and the public. Ultimately, only objectives that are within the SNB’s mandate and for which the central bank has the appropriate tools should be pursued. “Expanding the sphere of responsibility in line with private interests is incompatible with the independence guaranteed by law,” Jordan continued.
It is not possible for the SNB to remain in place to fulfill its legal duty. It must always be extremely flexible in order to react to the rapidly changing environment.
In this context, Jordan cited the Corona crisis or the collapse of Credit Suisse as examples. During these crises, the SNB showed maximum flexibility and determination with rapid measures. Moreover, the measures taken showed the public that they could trust the institution even in times of crisis.
“Having a narrowly defined mandate but also a broad scope of action in its implementation is vital to the success of our institutions, especially in such acute crisis situations,” Jordan said. Therefore, he pays the price for being “stubborn when it comes to orders, but flexible in their execution.”
(SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
