Swiss National Bank (SNB) Governing Board Chairman Thomas Jordan said on Wednesday that the possibility of additional interest rate increases should not be dismissed.
The real consequences of the economy from monetary tightening carried out so far are yet uncertain, he noted after delivering remarks at a conference about SNB's actions during the Credit Suisse crisis earlier this year.
In his speech, Jordan called for adjusting liquidity regulations to meet the "new reality of potentially faster and larger outflows of deposits" from commercial banks, adding that lenders should "prepare sufficient collateral that they can transfer to the SNB and other central banks." In addition, he stressed that "there needs to be an effective PLB [public liquidity backstop] that enables the SNB to provide liquidity loans to banks in difficulties that do not have sufficient collateral."
