The independence of the Swiss National Bank

June 21, 2011
Avenir Suisse, Zurich

Summary

In the financial crisis, many central banks found themselves obliged to resort to unconventional measures. Consequently it is no surprise that a debate has started about the independence of monetary policymakers. However, independence is only a means to an end. That end is defined in art. 5 of Switzerland's National Bank Act as pursuing a monetary policy that serves the interests of the country as a whole while ensuring price stability. Theory and practical experience throughout the world are clear on this point. The more independent a central bank, the better it fulfils its mandate. Since monetary policy takes effect with a considerable time lag, central bankers must be credible. Independence is a necessary prerequisite for a central bank to develop this credibility. The independence granted to the Swiss National Bank (SNB) is particularly important for the Swiss economy because monetary policy has to bear the main burden of adjustment when shocks occur. However, this independence does not apply absolutely, but only with regard to the statutory mandate. Moreover, it is not unconditional. It goes hand in hand with the SNB's accountability to the Federal Council and parliament, and the requirement to provide the public with regular information. The cantons are also included through the Bank Council and through shareholdings. Transparency and accountability are crucial, particularly in times of crisis, when public information requirements increase exponentially. A latent threat to the independence of central banks exists at all times. Although it was right to work closely with governments during the recent crisis, this could give rise to false expectations amongst politicians. What is important is that central bankers focus on their monetary policy mandate. In order to fulfil its mandate in the interests of the country as a whole, the SNB will continue to use the instruments it judges best suited to this purpose.

Download file now

The file can be downloaded with the button below.

Additional files

Related content

Author(s)

  • Philipp Hildebrand
    Chairman 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'.