The Swiss National Bank (SNB) reported a CHF 80 billion profit for 2024, planning a CHF 3 billion distribution to the Confederation and cantons. The SNB’s equity ratio stood at 7.9% in 2023. We propose that the SNB should ann...]]> The Swiss National Bank (SNB) reported a CHF 80 billion profit for 2024, planning a CHF 3 billion distribution to the Confederation and cantons. The SNB’s equity ratio stood at 7.9% in 2023. We propose that the SNB should announce a target for the equity ratio—rather than a distribution rule—and agree it with the Federal Department of Finance. This approach would enhance transparency and shift the…

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The SNB has acknowledged that foreign exchange market interventions are a full‐fledged
monetary policy tool. Indeed, well‐timed interventions have contributed to achieving one
of the world’s lowest inflation rate in 202...]]> The SNB has acknowledged that foreign exchange market interventions are a full-fledged monetary policy tool. Indeed, well-timed interventions have contributed to achieving one of the world’s lowest inflation rate in 2022 and 2023. Both the use of the instrument and its recognition in the monetary policy concept are welcome, but important questions remain: Download Report…

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Like most other central banks in developed countries, the SNB has been remunerating the deposits of banks – their reserves – since the Global Financial Crisis. For many years, the interest rate was negative, so banks were pay...]]> Like most other central banks in developed countries, the SNB has been remunerating the deposits of banks – their reserves – since the Global Financial Crisis. For many years, the interest rate was negative, so banks were paying the SNB for holding their reserves. As the interest rate has become positive, like other central banks, the SNB is now paying banks. Many reasons explain this general…

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The Bank Council plays an important role in overseeing the SNB. It makes proposals for the appointment of members of the Extended Governing Board and it must approve the level of provisions, which directly affects profit dist...]]> The Bank Council plays an important role in overseeing the SNB. It makes proposals for the appointment of members of the Extended Governing Board and it must approve the level of provisions, which directly affects profit distribution. Yet, the Bank Council is hardly visible in the public and seems to be accountable to no-one. This is inappropriate. We use the recent example of the decision of the…

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The reappearance of inflation in 2021 has elicited a two-step reaction from the SNB. First, it allowed the exchange rate to appreciate. Second, it has started to raise its interest rate. As it continues battling inflation, wh...]]> The reappearance of inflation in 2021 has elicited a two-step reaction from the SNB. First, it allowed the exchange rate to appreciate. Second, it has started to raise its interest rate. As it continues battling inflation, which of these two strategies will it pursue? The choice can be driven by the implications of each one on different segments of the economy. Another criterion concerns the size…

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