Multilingual Monetary Policy: Unfolding Language and Policy Preferences of Swiss Central Bankers

Abstract

[EN] Understanding monetary policy has always been of paramount economic and political importance. However, it remains a difficult task, despite transparency efforts and the regular flow of information to the public, which becomes even more complex when communication channels are multilingual. This paper examines the policy narratives of the Swiss National Bank (SNB) in terms of language and policy preferences, using the corpus of speeches delivered by its members over the period 1997-2022. Using a dynamic semantic search strategy based on top2vec, the framework analysis was able to identify interlingual similarities and differences with the help of pre-trained multilingual models. The results show that the SNB's communication strategy is strongly oriented towards the objectives assigned to the central bank, with attention being paid to systemic risks, banking regulation and financial markets, which emerge as second but no less important objectives, closely linked to the international environment, in particular the Eurosystem as a strategic aspect of the stability of the Swiss franc. The results suggest that English is used exclusively to address core central banking issues (monetary policy, inflation and interest rates), while uncertainty concerns seem to be reported more in German or French. The resulting dual semantic space, consisting of embedded words and documents, yielded relevant topics with respect to the size and scope of the corpus. Furthermore, informative indices could be constructed for policy measurement, as a crisis index was found to be consistent with the business cycle fluctuations and technical recessions experienced in Switzerland over the last 25 years.