SNB sees independence as the guarantor of prosperity and growth
Published: Saturday, Nov 18th 2023, 10:40
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According to SNB Chairman Thomas Jordan, the independence of the Swiss National Bank (SNB) is one of the guarantors of "prosperity and growth" in Switzerland. In a speech at ETH Day 2023, he emphasized the joint contribution to Switzerland's success.
"Without independence, there can be no free research and no monetary policy shielded from vested interests," emphasized Jordan in his speech. "But independence is neither a law of nature nor a matter of course."
For Jordan, maintaining independence depends on three points in particular. Firstly, independence must be effectively practiced at the SNB. For the SNB, this means that it "always gears its monetary policy towards maintaining price stability."
Secondly, it is important to account for what the SNB regularly does to the Federal Assembly and the public. Finally, only objectives that are covered by the SNB's mandate and for which the central bank has the appropriate instruments may be pursued. "An expansion of the scope of tasks driven by special interests is not compatible with the independence enshrined in law," Jordan continued.
In order to fulfill its legal mandate, the SNB cannot afford to stand still. It must always be highly flexible in order to be able to react to the rapidly changing environment.
In this context, Jordan cited the coronavirus crisis and the downfall of Credit Suisse. In these crises, the SNB had demonstrated maximum flexibility and determination by taking swift action. In addition, the measures taken showed the population that they could rely on the institution even in times of crisis.
"A narrowly defined mandate with a great deal of room for maneuver in its implementation is crucial for the success of our institutions, especially in such acute crisis situations," said Jordan. It therefore pays to be "stubborn about the mandate but flexible in its implementation".
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