Targeting the money market rate produces lower variability in teh economy and is a better policy target than a repurchase rate during periods of financial turmoil, a Swiss National Bank paper published on 19 August says.

Most central banks target a short-term market interest rate. However, some target the rate they charge financial institutions for the provision of short-term funds - typically a repo rate. During the financial crisis, the level and volatility of interest rate spreads increased