The Swiss National Bank will continue to take part in concerted intervention on currency markets as necessary president Pierre Languetin told the banks annual meeting. He said the dollar had on occasion hit highs or lows which bore no relation to economic fundamentals and cooperation between all monetary authorities was necessary to prevent it breaching thresholds that would damage everyone. We are resolved -- as we have done in the past -- to take part in concerted intervention to the extent that this is possible and desirable Languetin said. Languetin said Switzerland had noted with satisfaction the six nation Paris accord on currency stabilisation measures in February adding that it had anchored the principle of strengthened international cooperation. He said measures such as recent concerted intervention were useful in the short term. But he added The (Paris) Louvre accord can produce no lasting effects without a correction of the fundamental imbalances without a reduction of the American budget deficit and without stronger growth in Europe and Japan. Languetin said certain changes would probably be necessary in the too expansive monetary policy of the United States adding that there was a prevailing view that U.S. Money supply was expanding too strongly. If this should last long the dollar could only be stabilised at the cost of a substantial easing in monetary policy on the part of the other central banks which would in turn create the basis for a new wave of world-wide inflation he said. One positive factor was that monetary authorities in the most important countries had not relinquished their anti-inflation policies.
SWISS COMMITTED TO JOINT CURRENCY INTERVENTION