Communicating Policy Options at the Zero Bound

40 Pages Posted: 6 Jun 2008

See all articles by Lucas Burkhart

Lucas Burkhart

Swiss National Bank

Andreas M. Fischer

Swiss National Bank; Centre for Economic Policy Research (CEPR)


This paper examines a special episode in communication practices of the Swiss National Bank (SNB) when short-term interest rates reached the zero bound. A particular feature of SNB communication policy at the time was to talk openly about alternative policy instruments despite the fact that they were never implemented. Non-sterilized FX interventions were frequently mentioned as a potential instrument. We ask how did financial markets respond to the SNB's repeated references of non-sterilized interventions? The empirical results with high frequency data provide strong evidence that SNB intervention references depreciated the domestic currency for several hours. The case study supports the view that communication is an effective tool for monetary policy.

Keywords: Central Bank Communication, Exchange Rate, zero bound

JEL Classification: E58, F31

Suggested Citation

Burkhart, Lucas and Fischer, Andreas M., Communicating Policy Options at the Zero Bound. CEPR Discussion Paper No. DP6563, Available at SSRN:

Lucas Burkhart

Swiss National Bank ( email )

Fraumuensterstr. 8
Zuerich, 8022

Andreas M. Fischer (Contact Author)

Swiss National Bank ( email )

Borsenstrasse 15
CH-8022 Zurich
+41 1 631 3294 (Phone)
+41 1 631 3901 (Fax)

Centre for Economic Policy Research (CEPR)

United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics