Swiss National Bank

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Swiss National Bank
Founded 1907
Headquarters Zurich, Switzerland
Web site

The Swiss National Bank conducts the country’s monetary policy as an independent central bank.[1]

In October of 2008, the European Central Bank, the Bank of England and the Swiss National Bank supplied the financial sector with short-term overnight dollar loans in an effort to keep cash flowing in the troubled banking system.[2]

Monetary Policy Strategy[edit]

The SNB’s monetary policy strategy consists of three elements: the SNB states how it defines price stability; Secondly, it bases its monetary policy decisions on a medium-term inflation forecast. Thirdly, it sets an operational target range for its chosen reference interest rate, the three-month Libor.


The SNB was established in 1907. Its first council president was Johann Daniel Hirter, who was previously the owner of a shipping and coal company and held several political posts in Switzerland.[3]

The national bank celebrated its 100th anniversary on April 27, 2007.[4]

On September 6, 2011, the SNB voted to peg the franc at 1.20 to the euro, pledging to buy "unlimited quantities" of foreign currencies to force down its value.[5]

On June 16, 2011, The SNB voted to maintain its key interest rate target at 0.25 percent, releasing statements that Swiss exports and tourism industries are at risk given the strong Swiss franc (versus the dollar and the euro).[6]

In December of 2014, the SNB introduced a negative interest rate on deposits held by lenders, moving to hold down the value of the Swiss franc amid turmoil in the global currency markets and expectations of deflation. Effective Jan. 22, 2014 it began charging banks 0.25 percent interest on deposits exceeding a certain threshold. The bank had quintupled its foreign currency holdings since 2009 to 470 billion francs, as it intervened to hold down the franc.[7]

On June 10, 2018, Switzerland held a referendum on the Vollgeld, called the "Sovereign Money" Initiative, of which the bank had been a vocal opponent. The initiative, which would have radically changed the Swiss banking system by abolishing Fractional Reserve Banking, was rejected by 75.7% of Swiss voters. Advocates had argued it would stabilize the economy by reducing indebtedness, while critics insisted it would hurt both the Swiss and global economies by making Switzerland unattractive for foreign business and impairing international banks.[8]

Coordinated Action With Federal Reserve[edit]

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced coordinated actions on November 30, 2011 to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.

These central banks agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.

As a contingency measure, the central banks agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant.[9]

Key People[edit]


National Bank Act (serves as the statutory basis for the Bank and its activity)