Swiss National Bank: Reserve Ratios Needed Increases to 4%

Swiss National Bank: Reserve Ratios Needed Increases to 4%

Mon, Apr 22nd 2024

Starting July 1, 2024, the Swiss National Bank will enforce stricter minimum reserve requirements, aiming to bolster monetary policy effectiveness.

KEYSTONE/Michael Buholzer

The Swiss National Bank (SNB) is increasing the minimum reserve requirements for domestic banks. To this end, it is amending the National Bank Ordinance as of July 1, 2024.

Specifically, according to Monday’s announcement, liabilities from callable customer deposits (excluding tied pension assets) will in future be included in full in the calculation of the minimum reserve requirement, as will other relevant liabilities.

The previous exception that only 20T of these liabilities are to be taken into account for the calculation will therefore be abolished. The SNB is also raising the minimum reserve ratio to 4% from the previous 2.5%.

In this way, the SNB wants to ensure “continued effective and efficient implementation of monetary policy”, as it writes. As banks’ sight deposits, which are held to meet the minimum reserve requirement, do not earn interest, the SNB’s interest expense will fall.

The adjustments do not affect the current monetary policy orientation.

Last year, the SNB recorded a loss of CHF 8.5 billion on its Swiss franc positions, a large part of which (CHF 7.4 billion) came from interest on banks’ current account balances.


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