The global crisis has clearly underlined the need for a regulatory approach addressing systemic risk issues head-on. This is the aim of macroprudential instruments which are focused, first, on enhancing the resilience of the financial system to adverse shocks, and second, on trying to preventively contain the build-up of systemic risk. This macroprudential approach provides the necessary complement to sound microprudential regulation and supervision as well as to a monetary policy that focuses primarily on price stability.

The case for macroprudential policies applies strongly in Switzerland. While the Swiss economy has been less affected by the recent crisis than many others, medium-term risk to financial stability has been building up, driven by persistently strong momentum in the mortgage and real estate markets. The dismal consequences of the recent global crisis as well as our own housing market crisis experience of the early 1990s are stark reminders that we should not take any chances in this regard.

Against this background, the availability of a new macroprudential instrument, a countercyclical capital buffer (CCB), is an important step forward. It is an incentive-oriented instrument based on the principle of prudence. It can and will - if necessary - be used in a flexible way to deal with the problem of cyclical risks to financial stability.