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23 Feb 2016
SNB's Jordan - Unconventional measures cannot be deployed endlessly
Swiss National Bank’s Jordan, while speaking in Frankfurt, indirectly hinted that interest rates cannot go further into the negative territory.
Jordan said, “"By introducing unconventional monetary policy measures, central banks have regained a certain room for maneuver. However, these unconventional measures cannot be deployed endlessly to achieve desirable monetary conditions.
Interest rates, for example, cannot continue to be lowered into negative territory without at some point precipitating a flight to cash. Foreign exchange market interventions and quantitative easing programmes carry with them the increasing risk that a central bank's ability to conduct monetary policy may be compromised in the long term.”
Jordan said, “"By introducing unconventional monetary policy measures, central banks have regained a certain room for maneuver. However, these unconventional measures cannot be deployed endlessly to achieve desirable monetary conditions.
Interest rates, for example, cannot continue to be lowered into negative territory without at some point precipitating a flight to cash. Foreign exchange market interventions and quantitative easing programmes carry with them the increasing risk that a central bank's ability to conduct monetary policy may be compromised in the long term.”