National Bank hailed as source of prosperity

The National Bank headquarters next to parliament in Bern during the 1930s Keystone

Swiss President Micheline Calmy-Rey says the National Bank is crucial for the country's economy, social prosperity and stability.

The National Bank (SNB) was celebrating its 100th anniversary on Friday with festivities in Zurich attended by dignitaries, including the head of the European Central Bank, Jean-Claude Trichet.

Calmy-Rey described the role of National Bank as the “Rütli meadow of monetary policy”, in a reference to the site where Swiss swore an allegiance to unite against the Habsburg emperor in the 13th century.

She said the unspectacular work of the SNB guaranteed price and currency stability of the Swiss franc.

Calmy-Rey recalled the long-running conflicts in the 19th century before Switzerland’s central bank was established in 1907.

For nearly 60 years after the founding of modern Switzerland in 1848 more than 800 types of coin and bank note were in circulation, with each of the 26 cantons insisting on their right to mint their own currency.

Active role

Calmy-Rey also praised the National Bank for its active role in the 1990s during the controversy over Holocaust assets in Switzerland and country’s policy during the Second World War.

She said the bank had cooperated in an effort to re-establish justice and it helped create a special fund for victims of the Holocaust.

She called for continued efforts to combat money laundering, the financing of terrorism and preventing dictators from placing illicit assets in Swiss bank accounts.

Calmy-Rey, who is also the Swiss foreign minister, said it was shocking that Switzerland might have to return frozen assets to the family of the former dictator of Haiti, Jean-Claude “Baby Doc” Duvalier, despite allegations of serious human rights abuses.

Positive outlook

SNB President Jean-Pierre Roth said the growth outlook for the Swiss economy was positive.

“Switzerland is in a phase of economic boom. Employment is almost full, we’ve had price stability for almost 13 years and the economic outlook is favourable in almost every aspect,” Roth said in a speech.

He said one of the central bank’s duties was to ensure confidence in the country’s currency, a key factor in the functioning of the economy.

The Swiss franc hit a nine-year low against the euro this week, pressured by the low interest rates.

The SNB expects the Swiss economy to expand by around 2.5 per cent and an inflation rate of 0.8 per cent this year.

Jean-Claude Trichet said the SNB’s “healthy and wise monetary policy” was one of the main reasons for the low unemployment rate in Switzerland.

swissinfo with agencies

In brief

Switzerland’s central bank is independent of the government and is free to set interest rates.

Its policy goal is price stability, which it says is an important precondition for economic growth and prosperity.

It bases its monetary policy on a medium-term inflation forecast.

Its profit is broadly speaking divided up among the cantons (two-thirds) and the federal government.

100 years of Swiss National Bank

Switzerland’s central bank opened for business on June 20, 1907.

It conducts the country’s monetary policy as an independent central bank. Its primary goal is to ensure price stability, which it considers an important condition for growth and prosperity.

The SNB is responsible for the issuing of banknotes and the distribution of coins.