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The latest quarterly filing statement of the Swiss National Bank (SNB) has been issued. Switzerland’s publicly traded central bank had a decrease in the value of its US stock holdings by around $5 billion in Q3 of 2021, ending the quarter with a value of $157 billion. SNB currently has a profit of over $40 billion for the 9 months ended in the year. Perhaps subjective, it looks like a banner year for an entity who turns a profit through currency manipulation.

As for other affairs the central bank has been concerned with since last quarter; how about climate change?

Several weeks ago the question was asked to board member Andrea Maechler, whether the bank should use its money to “influence companies” linked to climate change initiatives. According to Reuters, the board member responded that it wasn’t the SNB’s job:

We don’t have the goal to make the world greener. That’s not our mandate.

A bold statement, and something one would be hard pressed to hear coming from a central banker on this side of the Atlantic.

But then the following week happened. On November 3 Reuters reports:

The Swiss National Bank reiterated its commitment to tackling climate change on Wednesday, saying it would take environmental factors into consideration in its macroeconomic modeling and monetary policy analysis.

The SNB bought “green bonds and excluded companies that systemically cause severe environmental damage.” Mining companies are also excluded from their purchases, which is ironic since green technology like electric vehicles rely heavily on the mining industry.

Despite Ms. Maechler comment, the SNB is using some of its power to invest in the green economy. To what ends remains anyone’s guess.

She was again in the news last week, reiterating their ongoing currency intervention strategy, also to ends which no one knows:

The reality is, we continue to have a safe-haven currency… It is something that we do continue to monitor, and we will continue to do so.

Ensuring the currency doesn’t become too strong is the stated reason behind SNB’s money creation scheme, one of the outcomes being the buying and selling of US stocks.

There are almost 200 national currencies in the world. If history is any indication of the past, and if one can reasonably predict the future, it’s likely there will only be a handful of safe-haven currencies in the world at any given time. Even if all national currencies continue to decline into inflationary oblivion, there will always be the best of the worst currencies. The US dollar, the Japanese yen and Swiss franc are a few of a handful of such winners.

For all the concern over the risk of the franc becoming too strong, they should be concerned with the franc becoming too weak. Undoubtedly, the SNB will never want to lose the franc’s status as a safe-haven currency. So they’re looking to find a level where the franc is weaker than some, or all other safe-haven currencies, but strong enough to maintain safe-currency status.

Like central bank investments into the green economy, no measurement, calculation nor logic will suffice to explain just how weak the franc should be. But with just a little more money creation, maybe one day, their objective can be met.

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