Following the comments from the Swiss National Bank (SNB) Chairman Thomas Jordan, board member Maechler says that the liquid SARON-based yield curve key for SNB policy.
Risk of renewed upward pressure on the Swiss franc is high, the situation on forex market fragile.
It costs more to hedge against Swiss franc appreciation than against its depreciation on the options market.
Move away from Libor is a very challenging task for financial markets.
SARON is establishing itself as the leading reference rate for financial products, market participants have to prepare themselves for the post-Libor era.
Creation of liquid, SARON-based yield curve is very important for the Swiss financial system and for transmission of SNB monetary policy.