Swiss National Bank
Encyclopedia
The Swiss National Bank (SNB) is the central bank
of Switzerland
. It is responsible for Swiss monetary policy
and for issuing Swiss franc
banknote
s.
The names of the institution in the four official languages of the country are: ; ; ; .
The SNB is an Aktiengesellschaft
under special regulations. About 55% of its shares are owned by public institutions like cantons
and cantonal bank
s. The remaining shares are traded on the stock market. They are mostly owned by private individuals.
The Swiss National Bank has 2 head offices, one is in Bern and the other one in Zurich.
The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by Constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.
Cash supply and distribution
The National Bank is entrusted with the note-issuing privilege. It supplies the economy with banknotes that meet high standards with respect to quality and security. It is also charged by the Confederation with the task of coin distribution.
Cashless payment transactions
In the field of cashless payment transactions, the National Bank provides services for payments between banks. These are settled in the Swiss Interbank Clearing (SIC) system via sight deposit accounts held with the National Bank.
Investment of currency reserves
The National Bank manages currency reserves. These engender confidence in the Swiss franc, help to prevent and overcome crises and may be utilised for interventions in the foreign exchange market.
Financial system stability
The National Bank contributes to the stability of the financial system. Within the context of this task, it analyses sources of risk to the financial system, oversees systemically important payment and securities settlement systems and helps to promote an operational environment for the financial sector.
International monetary cooperation
Together with the federal authorities, the National Bank participates in international monetary cooperation and provides technical assistance.
Banker to the Confederation
The National Bank acts as banker to the Swiss Confederation. It processes payments on behalf of the Confederation, issues money market debt register claims and bonds, handles the safekeeping of securities and carries out money market and foreign exchange transactions.
Statistics
The National Bank compiles statistical data on banks and financial markets, the balance of payments, the international investment position and the Swiss financial accounts.
Monetary policy affects production and prices with a considerable time lag. Consequently, it is based on inflation forecasts rather than current inflation. The SNB’s monetary policy strategy consists of three elements: a definition of price stability (the SNB equates price stability with a rise in the national consumer price index of less than 2% per annum), a medium-term conditional inflation forecast, and, at operational level, a target range for a reference interest rate, which is the Libor for three-month investments in Swiss francs.
A list of the Bank Council members is published on the SNB website (see: http://www.snb.ch/en/iabout/snb/bodies/id/snb_bodies_council )
The SNB manages the official gold reserves
of Switzerland, which as of 2008 amount to 1145 tonne
s and are valued at 30.5 billion CHF
. The gold is believed to be stored in huge vaults beneath the Federal Square (Bundesplatz
) to the north of the federal Parliament building
in Bern, but the SNB treats the location of the gold reserves as a secret. Independent confirmation of the gold's location was obtained by the Bernese newspaper Der Bund
in 2008. It published a photograph of the bullion that a keystone photographer was allowed to take at the SNB premises in Bern in 2001. Der Bund also quoted a retired official of the city's surveying
office as saying that the gold vaults take up an area of roughly half the Federal Square and have a depth of dozens of meters, down to the level of the Aar river. The SNB says that the gold reserves are stored in different safe places in Switzerland and abroad.
). The SNB was the largest gold distribution centre in continental Europe
before the war. A study by the U.S. Department of State
in 1997 notes that the Bank, "must have known that some portion of the gold it was receiving from the Reichsbank was looted from occupied countries." This was confirmed by the Swiss Bergier commission
in 1998 which concluded that the SNB received $440m in gold from Nazi sources, of which $316m is estimated to have been looted.
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
. It is responsible for Swiss monetary policy
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
and for issuing Swiss franc
Swiss franc
The franc is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen , it is in wide daily use there...
banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s.
The names of the institution in the four official languages of the country are: ; ; ; .
The SNB is an Aktiengesellschaft
Aktiengesellschaft
Aktiengesellschaft is a German term that refers to a corporation that is limited by shares, i.e. owned by shareholders, and may be traded on a stock market. The term is used in Germany, Austria and Switzerland...
under special regulations. About 55% of its shares are owned by public institutions like cantons
Cantons of Switzerland
The 26 cantons of Switzerland are the member states of the federal state of Switzerland. Each canton was a fully sovereign state with its own borders, army and currency from the Treaty of Westphalia until the establishment of the Swiss federal state in 1848...
and cantonal bank
Cantonal bank
Cantonal banks are Swiss governmental-owned commercial banks, that use the canton that they are based in as guarantee for the assets held there. However, currently they are in process of being partially privatised...
s. The remaining shares are traded on the stock market. They are mostly owned by private individuals.
The Swiss National Bank has 2 head offices, one is in Bern and the other one in Zurich.
Tasks
Monetary policyThe Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by Constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.
Cash supply and distribution
The National Bank is entrusted with the note-issuing privilege. It supplies the economy with banknotes that meet high standards with respect to quality and security. It is also charged by the Confederation with the task of coin distribution.
Cashless payment transactions
In the field of cashless payment transactions, the National Bank provides services for payments between banks. These are settled in the Swiss Interbank Clearing (SIC) system via sight deposit accounts held with the National Bank.
Investment of currency reserves
The National Bank manages currency reserves. These engender confidence in the Swiss franc, help to prevent and overcome crises and may be utilised for interventions in the foreign exchange market.
Financial system stability
The National Bank contributes to the stability of the financial system. Within the context of this task, it analyses sources of risk to the financial system, oversees systemically important payment and securities settlement systems and helps to promote an operational environment for the financial sector.
International monetary cooperation
Together with the federal authorities, the National Bank participates in international monetary cooperation and provides technical assistance.
Banker to the Confederation
The National Bank acts as banker to the Swiss Confederation. It processes payments on behalf of the Confederation, issues money market debt register claims and bonds, handles the safekeeping of securities and carries out money market and foreign exchange transactions.
Statistics
The National Bank compiles statistical data on banks and financial markets, the balance of payments, the international investment position and the Swiss financial accounts.
Monetary policy
The SNB pursues a monetary policy serving the interests of the country as a whole. It must ensure price stability, while taking due account of economic developments.Monetary policy affects production and prices with a considerable time lag. Consequently, it is based on inflation forecasts rather than current inflation. The SNB’s monetary policy strategy consists of three elements: a definition of price stability (the SNB equates price stability with a rise in the national consumer price index of less than 2% per annum), a medium-term conditional inflation forecast, and, at operational level, a target range for a reference interest rate, which is the Libor for three-month investments in Swiss francs.
General Meeting of Shareholders
The General Meeting of Shareholders is held once a year, as a rule in April. Owing to the SNB’s public mandate, the powers of the Shareholders’ Meeting are not as extensive as in joint-stock companies under private law.Bank Council
The Bank Council oversees and controls the conduct of business by the Swiss National Bank. It consists of 11 members. Six members, including the President and Vice President, are appointed by the Federal Council, and five by the Shareholders’ Meeting. The Bank Council sets up four committees from its own ranks: an Audit Committee, a Risk Committee, a Remuneration Committee and an Appointment Committee.A list of the Bank Council members is published on the SNB website (see: http://www.snb.ch/en/iabout/snb/bodies/id/snb_bodies_council )
Governing Board
The Swiss National Bank’s management and executive body is the Governing Board. The Governing Board is responsible in particular for monetary policy, asset management strategy, contributing to the stability of the financial system and international monetary cooperation. The Governing Board consists of 3 members:- Chairman: Philipp M. Hildebrand, Zurich
- Vice Chairman: Thomas Jordan, Berne
- Member: Jean-Pierre Danthine, Zurich
Gold reserves
Official gold reserves
A gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders , or trading peers, or to secure a currency....
of Switzerland, which as of 2008 amount to 1145 tonne
Tonne
The tonne, known as the metric ton in the US , often put pleonastically as "metric tonne" to avoid confusion with ton, is a metric system unit of mass equal to 1000 kilograms. The tonne is not an International System of Units unit, but is accepted for use with the SI...
s and are valued at 30.5 billion CHF
Swiss franc
The franc is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen , it is in wide daily use there...
. The gold is believed to be stored in huge vaults beneath the Federal Square (Bundesplatz
Bundesplatz (Bern)
The Bundesplatz is a plaza in the Old City of Bern, the medieval city center of Bern, Switzerland. It is part of the Innere Neustadt which was built during the second expansion in 1255 to 1260, though the plaza was not built until much later...
) to the north of the federal Parliament building
Bundeshaus
The Federal Palace is the name of the building in Bern in which the Swiss Federal Assembly and the Federal Council are housed.The building was designed by the architect Hans Auer and its inauguration took place on 1 April 1902...
in Bern, but the SNB treats the location of the gold reserves as a secret. Independent confirmation of the gold's location was obtained by the Bernese newspaper Der Bund
Der Bund
Der Bund is a daily German-language newspaper published in Bern, Switzerland. Established in 1850 and associated with the cause of liberalism, it was among the leading quality newspapers in Switzerland for much of the 19th and 20th centuries. In economic distress since the 1980s, its circulation...
in 2008. It published a photograph of the bullion that a keystone photographer was allowed to take at the SNB premises in Bern in 2001. Der Bund also quoted a retired official of the city's surveying
Surveying
See Also: Public Land Survey SystemSurveying or land surveying is the technique, profession, and science of accurately determining the terrestrial or three-dimensional position of points and the distances and angles between them...
office as saying that the gold vaults take up an area of roughly half the Federal Square and have a depth of dozens of meters, down to the level of the Aar river. The SNB says that the gold reserves are stored in different safe places in Switzerland and abroad.
WWII Controversy
There is controversy over the role of the Swiss National Bank in the transfer of Nazi gold during World War II (see Nazi goldNazi gold
Nazi gold is the gold transferred by Nazi Germany to overseas banks during the Second World War. The regime executed a policy of looting the assets of its victims to finance the war, collecting the looted assets in central depositories. The occasional transfer of gold in return for currency took...
). The SNB was the largest gold distribution centre in continental Europe
Continental Europe
Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands....
before the war. A study by the U.S. Department of State
United States Department of State
The United States Department of State , is the United States federal executive department responsible for international relations of the United States, equivalent to the foreign ministries of other countries...
in 1997 notes that the Bank, "must have known that some portion of the gold it was receiving from the Reichsbank was looted from occupied countries." This was confirmed by the Swiss Bergier commission
Bergier commission
The Bergier commission in Bern was formed by the Swiss government on 12 December 1996. It is also known as the ICE ....
in 1998 which concluded that the SNB received $440m in gold from Nazi sources, of which $316m is estimated to have been looted.
See also
- Banking in SwitzerlandBanking in SwitzerlandAll banks in Switzerland are regulated by Swiss Financial Market Supervisory Authority , which derives its authority from a series of federal statutes...
- Economy of SwitzerlandEconomy of SwitzerlandThe economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and political stability has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment...
- Swiss francSwiss francThe franc is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen , it is in wide daily use there...
- SARON (Swiss Average Rate Overnight)SARONSARON is an overnight interest rates average referencing the Swiss Franc interbank repo market. It was launched by the Swiss National Bank in cooperation with SIX Swiss Exchange. Since 25 August 2009, SARON has replaced the previously used repo overnight index...
External links
- Official site: Swiss National Bank
- Swiss and World Interest Rates, updated by ForexMotion.com.