New accord signed on central bank profits

The Swiss government and Swiss National Bank (SNB) have concluded a new agreement on the distribution of the SNB’s profit.

The agreement will cover the financial years 2011 to 2015. The SNB said in a statement on Monday that if the distribution reserve is positive, it would make an annual distribution payment of SFr1 billion ($1.09 billion) to the confederation and the cantons.

However, the bank warned that it was “unclear when the next distribution payment will take place, since this will depend on future developments in the financial markets”.

The new agreement covers the financial years 2011 to 2015, and stipulates that, before any distribution payments can be made, the distribution reserve must turn positive again.

The previous agreement from 2008 needed to be reviewed since the SNB reported a substantial SFr21.5 billion loss last year. That led to a shortfall of SFr5 billion in the bank’s distribution reserve.

If the financial situation were to improve greatly, leading to reserves of more than SFr10 billion, the distribution payment would exceed SFr1 billion, the statement added.