IMD-OWP23-POSTEVENT-REPORT

Participant reflection

Price stability Keeping prices stable is at the core of sustainable growth, explained Maechler, contextualizing the current inflation cycle as “global and broad-based”. After a long period of very low inflation things changed due to a series of major factors. Dominant was the COVID-19 pandemic, causing disruptions to global supply chains, etc. The world’s economy is currently in the process of battling back from the height of that effect. “The important thing to understand about inflation is that it is not only about a number, but an underlying dynamic. It is the pulse of the economy – and it’s that dynamic that changed substantially recently,” Maechler said. Financial stability An important aspect of the role performed by the SNB was recently in the spotlight in the context of the Credit Suisse crises and the following merger with UBS: that of lender of last resort. Maechler elaborated on what the purpose of that instrument is: “The idea is not to bail out institutions, but to prevent widespread damage to the financial system. To avoid an excessive

loss that triggers a series of fire sales that spread across institutions and eventually hits the sound and healthy ones. This is what we can stop using the designated instruments we have by providing liquidity.” Payment systems The advent of new technologies carries the potential to fundamentally change – in fact, it’s already changing – people’s relationship with money. According to Maechler, it’s a cautious balance between embracing technology, which is inevitable, but not at the expense of jeopardizing trust in money.

Competing demands

Less is more

Participant reflection

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OWP 2023