by Jordan, shown at a news conference last year, warns of neglecting the risks of inflation. Keystone/Anthony Anex The Swiss National Bank (SNB) can expand its balance sheet further if needed, says chairman of the board Thomas Jordan. “A big balance sheet is per se no problem. We can expand the balance sheet further, if monetary policy so requires,” he told the Neue Zürcher Zeitung newspaper in an interview published on Saturday. The SNB’s holdings of foreign exchange have ballooned to more than CHF900 billion (.1 trillion) due to its long-running campaign to weaken the franc via interventions. That practice not only drew scrutiny from the United States Treasury — the central bank’s huge pile of assets also exposes it to big swings in prices. The franc is still
Topics:
Swissinfo considers the following as important: 3) Swiss Markets and News, 3.) Swissinfo Business and Economy, Business, Featured, newsletter
This could be interesting, too:
Vibhu Vikramaditya writes Navigating the Slippery Slope: How Hoover’s Interventions Paved the Way for the Great Depression
Ryan McMaken writes Frédéric Bastiat Was a Radical Opponent of War and Militarism
Douglas French writes Millennials: In Costco We Trust
Vasil Georgiev writes Luftfahrtindustrie: Rückblick auf 2023 und Prognose für 2024
Jordan, shown at a news conference last year, warns of neglecting the risks of inflation. Keystone/Anthony Anex
The Swiss National Bank (SNB) can expand its balance sheet further if needed, says chairman of the board Thomas Jordan.
“A big balance sheet is per se no problem. We can expand the balance sheet further, if monetary policy so requires,” he told the Neue Zürcher Zeitung newspaper in an interview published on Saturday.
The SNB’s holdings of foreign exchange have ballooned to more than CHF900 billion ($1.1 trillion) due to its long-running campaign to weaken the franc via interventions. That practice not only drew scrutiny from the United States Treasury — the central bank’s huge pile of assets also exposes it to big swings in prices.
The franc is still highly valued, and inflation is just slightly below zero, according to Jordan. Still, “we only intervene as needed.”
He also rejected focusing monetary policy more closely on the exchange rate and said there still was a lot of slack left in the economy.
“It would be completely premature to begin shrinking the balance sheet and tightening monetary conditions,” he said. “It would be wrong to signal to the world now that the SNB will be the first central bank to usher in a restrictive policy.”
Asked whether the SNB was prepared to accept an inflation rate of 2% and more, similar to the US central bank, Jordan said every country was faced with a different situation.
“History has taught us a lesson: A recession is most likely if inflation gets out of control and measures are needed to fight it.”
It’s preferable to stabilise increasing prices at a maximum rate of 2%, he added.
You Might Also Like
Weekly SNB Sight Deposits and Speculative Positions: Inflation is there, CHF must Rise
2021-05-25
Update May 24 2021: SNB intervening. Sight Deposits have risen by +1.9 bn CHF, this means that the SNB is intervening and buying Euros and Dollars.
Swiss bank pays up to settle German tax evasion probe
2021-04-26
Switzerland’s Migros Bank has agreed to pay €2.4 million (CHF2.65 million) to clear up cross-border tax evasion issues with Germany. Migros is one of several Swiss banks that have shelled out a penalty to avoid prosecution in the neighbouring country. Other banks to have made such an arrangement in the past include UBS, Credit Suisse and Julius Bär.
Swiss ‘too big to fail’ banks pose little risk to the economy
2021-03-21
Three of Switzerland’s “too big to fail” banks no longer threaten to cause a seismic shift in the economy should they collapse, says the financial regulator. Zurich Cantonal Bank, PostFinance and the Raiffeisen banking group are now deemed to have put into place credible plans for an orderly bankruptcy.
Bitcoin Suisse bank license bid hits regulatory roadblock
2021-03-18
Cryptocurrency firm Bitcoin Suisse has withdrawn its application for a banking license, in part because it failed to meet the anti-money laundering requirements of the Swiss financial regulator.
The Swiss eID law has flaws, but is another version worth the wait?
2021-02-19
The eID is billed as a long-overdue key to the digital world, a single access point for services provided by a range of public and private-sector organisations. But the model proposed by Switzerland – being put to a nationwide referendum in March – is far from watertight.
Switzerland tops global e-commerce index
2021-02-18
Switzerland is the best equipped country for online shopping, according to a United Nations comparison of more than 150 states.
Two globally pioneering technologies among Swiss energy prize winners
2021-01-07
A floating solar power plant and a transport project using renewable hydrogen are among the winners of the 2021 Watt d’Or prize.
Covid-19 drives new car sales down to historic low
2021-01-06
The Swiss automobile industry registered its worst result in over 40 years, as the number of new cars hitting the road in 2020 fell by a quarter compared to the previous year.
Tags: Business,Featured,newsletter