EconomicReason

Swiss National Bank chairman Roth held a speech yesterday on the role of housing prices in Swiss monetary policy (unfortunately only available in German). Switzerland probably is, apart from Germany and Japan, the only country in the industrial world which does not currently experience a countrywide housing bubble, although there are quite a few local bubbles brewing in some areas, such as prestigious mountain resorts or large cities such as Zurich and Geneva.

Roth explicitly mentions speculation as a determinant of housing prices. Although his wording is quite cautious, he affirms that monetary policy would certainly react if the evolution of the housing market would threaten price stability. What is important - he is not relating to accommodating a bursting bubble, but to pre-empting a bubble from building up in the first place. This is quite a difference to the Fed attitude, which is to shut their eyes to speculation and promising to clean up after the bust.