Swiss central bank sees independence as the guarantor of growth

National Bank Chairman Thomas Jordan sees the independence of the central bank as one of the guarantors of prosperity and growth. © Keystone / Anthony Anex

According to the Swiss National Bank (SNB) Chairman Thomas Jordan, the independence of the SNB is one of the guarantors of "prosperity and growth" in Switzerland. In a speech at the federal technology institute ETH Zurich Day 2023, he emphasised the joint contribution to Switzerland's success.

“Without independence, there can be no free research and no monetary policy shielded from vested interests,” emphasised Jordan in his speech. “But independence is neither a law of nature nor a matter of course.”

For Jordan, maintaining independence depends on three points in particular. Firstly, independence must be effectively practised at the SNB. For the SNB, this means that it “always gears its monetary policy towards maintaining price stability.”

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Secondly, the SNB must be accountable to the Federal Assembly and the public on a regular basis. Finally, only objectives that are covered by the SNB’s mandate and for which the central bank has the appropriate instruments should be pursued. “An expansion of the scope of tasks driven by particular interests is not compatible with the independence enshrined in law,” Jordan continued.

In order to fulfil its legal mandate, the SNB cannot afford to stand still. It must always be highly flexible in order to be able to react to the rapidly changing environment.

In this context, Jordan cited the coronavirus crisis and the demise of Credit Suisse. In these crises, the SNB demonstrated maximum flexibility and decisiveness with rapid measures. In addition, the measures taken had shown the population that they could rely on the institution even in times of crisis.

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“A narrowly defined mandate combined with considerable room for manoeuvre in its implementation is crucial for the success of our institutions, especially in such acute crisis situations,” said Jordan. It therefore pays off to be “stubborn about the mandate, but flexible in its implementation”.

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