The Swiss franc and the financial market crisis

September 25, 2009
Kapitalmarktforum 2009 der WGZ-Bank Luxembourg SA, Luxembourg

Summary

The Swiss franc plays a key role in the development of the Swiss economy. Through the competitiveness of our export pricing, it impacts on our exports and consequently affects the business cycle. Via import prices, it has a direct impact on consumer prices. In addition, the Swiss franc has been – and still is – a factor in the success of the Swiss financial sector. The Swiss National Bank (SNB) takes the exchange rate into account in its monetary policy although it does not normally exert any direct influence on it. In the past, it has only been in rare emergency situations that the SNB has intervened to directly influence exchange rate developments. However, from March 2009, the appreciation in the Swiss franc induced by safe haven effects, in an exceptionally difficult economic situation entailing deflation risks, prompted the SNB to prevent an appreciation in the Swiss franc against the euro by purchasing foreign currency.

Prior to the financial market crisis, the Swiss franc’s safe haven role was frequently questioned, due to the fact that, for many years, the Swiss currency had not experienced any crisis-induced waves of appreciation. The crisis has shown that the Swiss franc still has a safe haven status. Moreover, this works both ways – the weakening of the Swiss franc prior to the financial market crisis was probably not least a result of declining risk aversion and thus a drop in demand for a safe haven. The SNB policy of becoming active in the foreign currency market in emergency situations has not damaged the international role of the Swiss franc or the interest rate bonus.

Download file now

The file can be downloaded with the button below.

Additional files

Related content

Author(s)

  • Thomas Jordan
    Member of the Governing Board

Your settings

Required: These cookies (e.g. for storing your IP address) cannot be rejected as they are necessary to ensure the operation of the website. These data are not evaluated further.
Analytics: If you consent to this category, data such as IP address, location, device information, browser version and site visitor behaviour will be collected. These data are evaluated for the SNB's internal purposes and are kept for two years.
Third-party: If you consent to this category, third-party services (used, for example, to add social multimedia content to the SNB's website) will be activated which collect personal data, process these data, disclose them abroad - worldwide - and place cookies. The relevant data protection regulations are linked in the 'Privacy statement for the website of the Swiss National Bank'.

Choose your preferred settings:

This website uses cookies, analytics tools and other technologies to provide requested features, content and services, to personalise the content shown, to provide links to social media, and to analyse the use of the website in anonymised form for the purposes of improving usability. Personal data are also disclosed abroad - worldwide - to video service providers and the analytics tools of these providers are used. More information is available under 'Manage settings'.