The balance sheet is primarily a reflection of the SNB's monetary policy activities. It results from the execution of the SNB's mandate to ensure price stability while taking due account of economic developments (cf. Questions and answers on monetary policy strategy). The operations conducted by the SNB in fulfilling its mandate affect the size and composition of its assets and liabilities, and can thereby exert a major influence on the development of the SNB's balance sheet.

Under the National Bank Act (NBA), the SNB is a special-statute joint-stock company. The provisions of the Code of Obligations relating to joint-stock companies also apply to the SNB, unless otherwise specified in the NBA. The SNB's annual financial statements consist of the income statement, the balance sheet and the notes. They are drawn up in accordance with the provisions of the Code of Obligations and generally accepted accounting principles while taking due account of the specific requirements of the SNB. The SNB must also comply with the regulations of the Swiss stock exchange, as its shares are listed there.

The SNB publishes detailed year-end results in its Annual Report and issues interim results on a quarterly basis. In addition, it publishes balance sheet items once a month on its data portal.

As a rule, the SNB's valuation principles are the same as those commonly applied by other listed companies (market value). The SNB reports assets and liabilities in Swiss francs. The accounting and valuation principles are outlined in detail in the Annual Report.

The SNB's assets consist for the most part of currency reserves and, to a lesser extent, of financial assets in Swiss francs. The majority of the SNB's assets, in particular the foreign currency investments and the claims from Swiss franc repo transactions, fulfil important monetary policy functions. The size and composition of the assets are therefore determined by the established monetary order and the requirements of monetary policy. In addition, special measures can also affect the composition of the SNB's assets. Examples include the loans under the SNB COVID-19 refinancing facility, the loans to Credit Suisse under emergency law based on the Federal Council's emergency ordinance of 16 March 2023 (cf. Questions and answers on repo transactions and other monetary policy instruments) and US dollar repo transactions under the swap arrangements with other central banks to enhance the global provision of US dollar liquidity (cf. Questions and answers on foreign exchange swaps with other central banks). These measures have led to the inclusion of the 'secured loans and loans under emergency law' and 'claims from US dollar repo transactions' items on the assets side of the SNB's balance sheet.

Foreign exchange reserves make up the bulk of the currency reserves. These foreign exchange reserves consist of bonds, equities and deposits at central banks and the Bank for International Settlements in foreign currency. As stipulated by art. 99 of the Federal Constitution, the SNB holds part of its currency reserves in the form of gold. Together with the reserve position and the Special Drawing Rights at the International Monetary Fund (IMF), currency reserves are part of the SNB's reserve assets.

Yes. The SNB is required by the Federal Constitution to set aside sufficient currency reserves from its earnings. This requirement is outlined in greater detail in the NBA, which states that the SNB is obliged to set up provisions permitting it to maintain the currency reserves at a level necessary for monetary policy. In so doing, it must take into account economic developments in Switzerland (art. 30 para. 1 NBA).

Central banks require currency reserves to ensure that they have room for manoeuvre in their monetary policy at all times. Moreover, strong currency reserves build confidence in the currency and help to prevent or overcome potential crises.

In certain circumstances, a central bank may have to draw on its currency reserves - for example to counteract a sharp and unwarranted depreciation of its country's currency. It can thereby combat a loss of value and the associated threat of inflation. In a small country like Switzerland with its internationally important financial centre, currency reserves are also important with regard to confidence. Having sufficient currency reserves indicates that the SNB is in a position to take far-reaching measures on its own, for example to overcome a crisis in the financial system.

As a rule, the SNB builds currency reserves from its earnings. This is why it does not distribute its entire profit. Part of the profits are retained and allocated to the provisions for currency reserves and therefore to the SNB's equity capital (cf. Questions and answers on equity capital and profit appropriation). Retained earnings increase the holdings of currency reserves. Currency reserves can, however, also be formed without increasing equity capital, namely by creating base money.

In the last few years, the volume of the currency reserves has been largely determined by the implementation of the SNB's monetary policy. From 2009, foreign currency purchases played a key role in combating an excessive appreciation of the Swiss franc, which led to the creation of additional base money. When foreign currency purchases are necessary, there is an increase in the foreign exchange reserves and therefore also in the currency reserves and the balance sheet total. In recent years up to and including 2021, foreign exchange purchases were necessary, at times on a large scale, which led to a manifold increase in the balance sheet total and the foreign exchange reserves. As a result, the growth in provisions for currency reserves, and consequently in the SNB's equity capital, has been unable to keep pace with the growth in the currency reserves. Owing to the change in the monetary situation, 2022 saw a return to net sales of foreign currencies.

No. Changes in the foreign exchange reserves cannot automatically be attributed to purchases or sales. Exchange rate fluctuations and changes in the prices of equities and bonds all play a role in this context.

The liabilities on the SNB's balance sheet essentially consist of banknotes in circulation, sight deposits held at the SNB, liabilities from Swiss franc repo transactions, SNB debt certificates (SNB Bills), foreign currency liabilities and the SNB's equity capital. The majority of the liabilities directly reflect the implementation of the SNB's monetary policy, i.e. providing liquidity to or absorbing liquidity from the money market. This is how the SNB influences the interest rate level. In recent years up to and including 2021, liquidity was primarily provided to the money market through foreign currency purchases, which the SNB used to counter upward pressure on the Swiss franc. The money market was provided with substantial liquidity through purchases of currency in exchange for Swiss francs, which was reflected on the liabilities side by a steep increase in sight deposits. Owing to the change in the monetary situation, the SNB began in September 2022 to reduce sight deposits again by way of open market operations. Liquidity-absorbing repo transactions and the issuance of short-term SNB debt certificates (SNB Bills) are used to reduce sight deposits, and thus the liquidity supply in the money market.

The sight deposits of domestic banks make up the largest portion of sight deposits at the SNB. They form the basis for the SNB's operations to steer liquidity on the Swiss franc money market. They are also used for the settlement of cashless payment transactions in Switzerland. Other components of sight deposits are liabilities towards the Confederation, sight deposits of foreign banks and institutions, and other sight liabilities. This last item consists primarily of sight deposits of non-banks (clearing offices, insurance companies, etc.).

Sight deposits at the SNB - just as banknotes in circulation - cannot in an economic sense be equated with capital borrowed by a normal company or a commercial bank, since sight deposits and banknotes can only be exchanged at the SNB itself for other legal tender, in other words banknotes or sight deposits. Moreover, they do not have a maturity or repayment date, and their amount can essentially be determined by the SNB.