The Swiss banking sector contributes significantly to value creation and is an important employer. Moreover, as suppliers of credit, the banks play a key role in the transmission of monetary policy. Many enterprises, however, perceive the banks as an inhibiting factor notably in economically difficult times. A frequently voiced criticism is that the banks actually undermine expansionary monetary policy with high interest rates.

Both aspects, the banks' development in the economic cycle and their role in the transmission of monetary policy on economic activity, are dealt with in this paper and discussed in light of the most recent experience.