The turmoil in credit markets should not be underestimated and could have an impact on economic growth, Swiss National Bank board member Philipp Hildebrand was quoted as saying on Saturday.
"We are dealing with a situation which we should not underestimate," Hildebrand told the Tages-Anzeiger newspaper in an interview. "The good news is the international macro environment has not been as robust as it is now since the end of the war. And our banks are also fundamentally in strong shape," he added. But he also said: "Nevertheless I believe that the events in the credit markets will not fail to leave some trace in the growth dynamic."
The newspaper also said Hildebrand believed it was too early to give a detailed assessment of the impact of the recent upheavals in financial markets. Hildebrand's remarks appeared a day after the United States Federal Reserve cut the discount rate it charges banks in an effort to stabilise credit markets, prompting a rally in stock prices on Wall Street.
Following the FED's move economists are starting to question whether the world's main central banks would push ahead with interest rate rises as doubts grow about economic growth.
The SNB has drained liquidity over the past week, after it had joined other central banks the week before to calm market worries of a global liquidity crises, injecting a total of 3.1 billion Swiss francs ($2.60 billion) on Thursday and Friday. The Swiss central bank had been expected to make further small rate increases to cool a buoyant economy before the crisis in credit markets broke.
Comments
Comments are closed.