The SNB plays a central role in contributing to financial stability, in particular by providing liquidity support to banks when needed.
The SNB's emergency liquidity assistance (ELA) framework was first formalised in 2003, incorporating lessons learned from past financial crises. This framework established three conditions for liquidity assistance: only against sufficient collateral, only to solvent banks, and only to banks or groups of banks deemed relevant for financial system stability. In 2023 and 2024, the SNB publicly announced an expansion of its framework, extending access to liquidity support to all banks in Switzerland, using mortgages and securities as collateral.
Building on this, the SNB is now working on introducing a new liquidity support framework, centred on the Extended Liquidity Facility (ELF). The ELF encompasses ELA and brings liquidity support closer to standard operations. A key objective of the ELF is to enhance banks' access to liquidity while reducing the stigma that can be associated with such support. It allows simplified access to limited liquidity volumes, while maintaining the same requirements as under ELA for larger volumes.
Regulatory efforts to strengthen banks' resilience to liquidity risk are also underway. Important initiatives include increasing banks' own liquidity provisions, introducing a minimum collateral requirement for central bank support, and anchoring a Public Liquidity Backstop in law. Together, these measures will enhance the ability of banks to withstand liquidity crises.