The Swiss National Bank (SNB) performs the functions of the central bank of Sweden.
Unlike most central banks, the SNB is not a state institution, although the influence of the State on its
politics is great. According to the results of the referendum, held in 1906, it was organized as a joint-stock
company and in the same year a corresponding law was adopted. The SNB started its activity in 1907. The Bank works
in closely cooperation and under the general guidance of the Government of Swiss Confederation. As any joint-stock
company, the Bank issues the listed stock. The capital stock of the Swiss Banks is about 50 mln. Swiss francs. Only
the citizens of Switzerland, Swiss companies and the companies, having headquarters in Switzerland can hold the
Goals and responsibilities
Price stability is an important condition for growth and prosperity. Inflation and
deflation worsens the economic situation. They complicate the process of decision-making by consumers and producers,
which leads to misallocation of labor power and capital as a result of redistribution of income and assets, and put
the economically weak at a disadvantage. The SNB equates price stability to consumer price at the level of not less
than 2 % per annum. Deflation - i.e. protracted period of decline in the price level - is deemed to be a violation
of the goal of price stability. Medium-term forecast of inflation is the main index for monetary policy.
The SNB implements its monetary policy by adjusting the liquidity in the money market and, consequently,
affecting the level of interest rates.
To implement monetary policy SNB uses different tools.
1. Target range of interest rates
The SNB implements monetary policy by setting a target range for its three-month rate (Swiss LIBOR rate). This
range usually has a spread of 100 b.p. and is reviewed at least once a quarter. This rate is used as a target
rate as it is the most important money market rate for investments in Swiss francs. Changes in this rate are
accompanied by a clear explanation concerning the changes of economic conditions.
2. Open market operations
Repo transactions are among the main instruments of the SNB monetary policy. They represent sale of the
securities by the payee (the borrower) to the cash provider (lender) with a simultaneous agreement to buy back
the securities of the same type and in the same quantity on a later date. This structure is similar to a secured
loan, where the payee must pay an interest to the cash provider. Repo transactions usually have very short
maturities - from one day to several weeks. The SNB uses such repo transactions to counteract the undesirable
movements of the three-month’s LIBOR rate. To avoid exceeding of the set level by the three-month’s LIBOR rate,
the Bank provides additional liquidity to commercial banks by means of repo transactions at lower rates and, as
a matter of fact, creates additional liquidity. On the contrary, increasing the repo rates, the SNB can reduce
liquidity or initiate a three-month’s growth of the LIBOR rate.
The SNB publishes "Quarterly Bulletin", a detailed assessment of current state of the economy and the review of
monetary policy. "Monthly Bulletin" is also published. It contains an overview of economic development. These
reports can provide information about changes in the assessment by SNB of the current situation in the
In addition to the usual instruments, the SNB has a number of other tools, including currency swaps and forward
transactions, purchase or sale of securities in Swiss francs. The SNB can also buy or sell derivatives on
receivables, securities, precious metals and currency pairs.
The SNB has the privilege of money emission. In addition, it provides the economy
with banknotes, meeting high standards of quality and safety. Also, its duties include the distribution of coins.
The SNB provides the services of payments between the banks in the field of
non-cash payments. All of them are made in the interbank payments system through the deposit accounts at the SNB.
The SNB manages the foreign currency reserves, being the most important component
of its assets. The bank needs foreign currency reserves to have room for maneuver in monetary policy at any time.
Currently, the level of foreign currency reserves is dictated directly by implementation of monetary policy or
compliance with minimum interest rate.
The SNB contributes to the stability of the financial system. It fulfills this
obligation by analyzing the sources of risk for the financial system and identifying the areas where actions are
required. In addition, it helps to create and implement a regulatory basis for the financial sector, and performs
control over systemically important payment systems and securities settlements.
Together with the federal authorities, the SNB participates in the international
monetary and financial cooperation and provides technical assistance.
The SNB acts as banker to the Confederation. It processes payments on behalf of the
Confederation, issues debt securities, bears responsibility for safekeeping of securities and controls the money
market and foreign exchange transactions.
The SNB collects statistical information on banks and financial markets, balance of
payments, direct investments, international investment positions and the Swiss financial reports.
Organizational structure and management
The General Meeting of Shareholders is held once a year, usually in April. Owing to
the SNB public mandat, the powers of the General Meeting of Shareholders are not as wide as those in joint stock
companies within the frames of the private law.
The Bank Council oversees and controls the conduct of business by the SNB. It consists of 11 members: six
members, including the Chairman and Vice-Chairman, appointed by the Federal Council, and five members at the
Jean Studer is the President of the Bank Council (initial elections were held in 2007, the current election 2012)
, Steymer Olivier is the Vice-Chairman (initial elections were held in 2009 , current election 2012).
Apart of the Chairman and Vice-Chairman, the Banking Council consists of nine other members. The full composition
of the Banking Board is available on the official SNB website.
The bank's highest governing executive body is the Board of Governors. Among other things, it is responsible for
monetary policy, management of investment strategy assets and international monetary cooperation.
The Board consists of three members:
- Thomas Jordan, Chairman of the Board, Zurich;
- Fritz Zurbrugg, Vice-Chairman;
- Andrea Maechler, member of the Board, Zurich.
They are responsible for the strategic and operational management of the SNB. The members of the Governing Board
and their alternates are appointed for six years by the Federation Council by the recommendation of the Board of
the Bank with the possibility of reelection.
Each member of the Board manages one of the three departments of the bank:
Department I consists of seven divisions:
- Economic Department
- Department of international monetary cooperation
- Department of legal and property issues
- General secretariat
- Department of internal auditors
- Department of compliance
- Stabilization fund
Department II consists of three departments:
- Finances and risks department
- Financial stability department
- Monetary regulation department
Department III consists of three departments:
- Financial markets department
- Bank operations department
- Information technologies department
- March 14
- June 20
- September 19
- December 12
- March 20
- June 29 (with press conference)
- September 18
- December 11 (with press conference)
- March 19
- June 18 (with press conference)
- September 17
- December 10 (with press conference)
- March 17
- June 16 (with press conference)
- September 15
- December 15 (with press conference)
- March 16
- June 15
- September 14
- December 14