Swiss National Bank
|Headquarters||Bern and Zurich|
|Established||16 January 1906 - 20 June 1907|
|Central bank of||Switzerland|
CHF (ISO 4217)
The bank is otherwise known as: German: Schweizerische Nationalbank; French: Banque nationale suisse; Italian: Banca nazionale svizzera; Romansh: Banca naziunala svizra, which are the four official languages of the country.
The SNB is an aktiengesellschaft under special regulations, and has two head offices, one is in Bern and the other one in Zurich.
The bank formed as a result of the need for a reduction in the number of banks of issue, which numbered 53 sometime after 1826. In the 1874 revision of the Federal Constitution it was given the task to oversee laws concerning the issuing of banknotes. Then in 1891 the Federal Constitution was revised again to entrust the Confederation with sole rights to issue banknotes. The National Bank Law was enforced on 16 January 1906, and the Nationalbank began business activities on 20 June 1907, and is thought then founded sometime during either 1906 or 1907. SNB itself states that it was founded in 1907.
Sometime during World War I (1914-1917 ), the bank was instructed to release notes of a small denomination, for the first time, by the Federal Council of Switzerland.
The Bundesrat devalued the Swiss Franc during 1936, and as a result, there was made available to the Nationalbank, an amount of monies, which the bank subsequently stored in a Währungsausgleischsfonds reserve for the future, for usage in situations of emergency.
During 1994 the Bank was described as a joint-stock company acting under the administration and supervision of the Confederation. It had eight branches and twenty sub-branches within cantons. The governing board had overall executive management of the Nationalbank, with supervision entrusted to its shareholders, the banks' council, the banks' committee, its local committees and auditing committee. There were three members of the governing board, who together decided the monetary policy of the Nationalbank. Towards the end of 1993, there were 566 employees.
As of 2015 the Nationalbank was privately owned, with the majority of shares belonging to cantons (45%) and banks of cantons (15%), and the smaller remainder in the possession of private individuals (40%). Shares of the SNB existed within SIX Swiss Exchange from 1907 onward.
The Nationalbank made an announcement on 6 September 2011, of its intention to address changes in the value of the Swiss Franc to the Euro. More specifically, that it wanted the value of the Franc to fall below 1.2 to the Euro. A cap was placed on exchange-rates in order to take measures to stem the development of a possible recession. The bank stated the 1.2 exchange value was defendable as the bank could potentially proceed to mint enough banknotes to control the rate sufficiently. The bank announced on January 15, 2015 the Euro currency arrangement would end as the Euro crisis had passed and the Europeans would be making financial policy changes.
The basic governing principles of the Nationalbank are contained within Article 99 of the Federal Constitution, which deals with matters of monetary policy. There are three numbered factors concerning principles explicitly mentioning the Nationalbank, of four altogether shown within the Article. The SNB is therefore obliged by constitutional statute law to act in accordance with the economic interests of Switzerland, accordingly, the prime function of the Nationalbank is:
to pursue a reliable monetary policy for the benefit of the Swiss economy and the Swiss people.
The Nationalbank publishes within its own site a list of research done as work in progress by staff members, which begin at 2004 (2 papers), to 2005 (2), 2006 (11), 2007 (17), 2008 (19), 2009 (16), 2010 (19), 2011 (14), 2012 (16), 2013 (11), 2014 (13), and to 1 August 2015 there is shown nine papers, a list of eight economic studies which relate to the tasks of the bank, listed from 2005, in addition to a bi-annually published update of research, listed from 2012 to the present.
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 utilized for interventions in the foreign exchange market.
Financial system stability
The National Bank contributes to the stability of the financial system by acting as an arbiter over monetary policy. 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.
The National Bank compiles statistical data on banks and financial markets, the balance of payments, the international investment position and the Swiss financial accounts.
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 year), 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.
The Bank Council oversees and controls the conduct of business by the Swiss National Bank and 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 )
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: Thomas Jordan
- Vice Chairman: Fritz Zurbrügg
- Member: Andréa M. Maechler
The SNB manages the official gold reserves of Switzerland, which as of 2008 amount to 1145 tonnes 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 (70%) and abroad (i.e. Bank of England and Bank of Canada).
World War II
The Swiss National Bank provided 1.2 billion CHF to the Reichsbank, of this, a value of approximately 780 million CHF of the gold given to the Nationalbank was gold which had been looted by the forces of Germany. In addition the Nationalbank also exchanged between 1.2–1.6 billion CHF for gold from the Allied forces. During 20 April 1944, gold from the gold reserves of Italy arrived from Como at the railway station within Chiasso.
There is controversy over the role of the Swiss National Bank in the transfer of Nazi gold during World War II. 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 US$440 million in gold from Nazi sources, of which US$316 million is estimated to have been looted. The gold from Nazi governship sources was in the form of ingots containing gold looted from Central Banks of Europe and gold from Jewish persons executed within the concentration camps established by the machination of the Nazi regime, which the SNB took without knowing these facts at the time, nor inquiring to any great degree in the process of its transfer into the possession of the SNB, according to a former Archivist of the SNB Robert Vogler.
- Banking in Switzerland
- Economy of Switzerland
- SARON (Swiss Average Rate Overnight)
- Swiss Financial Market Supervisory Authority (FINMA)
Notes and references
- Manfred Pohl; Sabine Freitag. Handbook on the History of European Banks (p.1032, 1034 - 1035. published by Edward Elgar Publishing 1 Jan 1994, 1303 pages, ISBN 1781954216, Elgar Original Reference Series. Retrieved 2015-07-31.
- Ivan Tibor Berend. An Economic History of Nineteenth-Century Europe: Diversity and Industrialization (p.162). Cambridge University Press 2013, 521 pages, ISBN 1107030706. Retrieved 2015-07-31.(this source is showing the specific info verbatim: founded in 1906)
- SNB - Questions and Answers on the SNB as a company (9.) [Retrieved 2015-08-01]
- A.J.P Taylor - The Origins of the Second World War, published 1961 (1st ed.) [Retrieved about 1994 (Waterstones) & 2015]
- Peter Bernholz (Ulrich Bindseil, Rudolf Richter, Justus Haucap, Christian Wey). Institutions in Perspective: Festschrift in Honor of Rudolf Richter on the Occasion of His 80th Birthday. Mohr Siebeck 1 Jan 2006, 407 pages, ISBN 3161490614. Retrieved 2015-07-31.
- K.J. Schell - The History of Information Security: A Comprehensive Handbook (p.232) published by Elsevier 28 Aug 2007, 900 pages, (edited by Karl Maria Michael de Leeuw, Jan Bergstra), ISBN 0080550584 [Retrieved 2015-08-01]
- International Currency Review. International Currency Review, Volume 30. Currency Journals Limited 2004. Retrieved 2015-07-31.(ed. original source: National Bank Law, used to locate Article 99 info)
- Stephen Mitford Goodson. A History of Central Banking and the Enslavement of Mankind. Black House Publishing Ltd 17 Apr 2015, 216 pages. Retrieved 2015-07-31.
- Bloomberg. Share Price of Schweizerische Nationalbank. published by Bloomberg Business & SIX Swiss Exchange. Retrieved 2015-08-01.
- SNB - Questions and Answers on the SNB as a company (5) [Retrieved 2015-08-01]
- Swissinfo.org (2016-10-07). "Who is speculating in Swiss central bank shares?". Retrieved 2016-10-12.
- SNB - Questions and Answers on the SNB as a company (9) [Retrieved 2015-08-01]
- R.A. - Foreign exchange published by The Economist 6 September 2011 [Retrieved 2016-08-01]
- EMMA THOMASSON & CATHERINE BOSLEY. Markets: Zurich. published by Reuters 6 September 2011. Retrieved 2015-08-01.(The report uses the word unlimited, to refer to banknote production numbers though the world being as it is limited and finite, this wouldn't have been strictly literally possible)
- C.W. (18 January 2015). "The Economist explains Why the Swiss unpegged the franc" The Economist. Retrieved 18 November 2015. The Economist website
- Constitution and laws (as at April 2015). published by the Swiss National Bank, Zurich (Switzerland) 2015. Retrieved 2015-07-31.
- Swiss national Bank - Article 99 - Geld und Waehrung [Retrieved 2015-07-31]
- SNB - Educational pdf published 2006 (2nd edition) [Retrieved 2015-08-01]
- SNB - Research: Working Papers [Retrieved 2015-08-01]
- SNB - Research: Economic Studies [Retrieved 2015-08-01]
- SNB - Research: Research Update [Retrieved 2015-08-01]
- Communications:New SNB Governing Board published by Schweizerische NationalBank
- Schwendener, Pascal (25 July 2008). "Schatz unterm Bundesplatz: Das Gold der Nationalbank" (in German). Der Bund. p. 18. Retrieved 2008-07-27.
- "Politique monétaire: L'or de la BNS occupera le Conseil des Etats - Suisse - 24heures.ch". 24heures.ch/.
- P. Marguerat (ed. Georg Kreis) (11 January 2013). Switzerland and the Second World War. Routledge. ISBN 1136756701. Retrieved 31 July 2015.
- Gianni Toniolo, Piet Clement (16 May 2005). Central Bank Cooperation at the Bank for International Settlements, 1930–1973. Studies in Macroeconomic History, Cambridge University Press. p. 252. ISBN 0521845513.
- Stuart Eizenstat (2 June 1998). "Eizenstat Special Briefing on Nazi Gold". United States Department of State. Retrieved 5 July 2006.
- ""Switzerland and Gold Transactions in the Second World War"" (PDF). (1.18 MiB). Bergier Commission, May 1998. Retrieved on 5 July 2006. Quote: " All in all, the Reichsbank shipped gold valued at 1,922 million francs, or 444 million dollars to Switzerland during the war." (p. 64)
- Gregg J. Rickman (31 December 2011). Conquest and Redemption: A History of Jewish Assets from the Holocaust. Transaction Publishers. p. 37. ISBN 1412808995. Retrieved 1 August 2015.
- Michael Lingenheld - INVESTING published by Forbes Magazine 12 March 2015 [Retrieved 5 August 2015]
- Business published by British Broadcasting Corporation 31 July 2015 [Retrieved 31 July 2015]