SNB Lifts Veil on Rate Meetings With New Discussion Summary

(Bloomberg) — The Swiss National Bank plans to release a so-called summary of monetary discussions in what may become a communication revolution for an institution traditionally shrouded in secrecy.

The new publication unveiled by President Martin Schlegel will arrive four weeks following each interest-rate decision, starting with the upcoming one this month. While individual positions won’t be revealed, the summary will show how officials reached a judgment in a step toward the sort of transparency seen in advanced economies such as the US.

“It will cover the two days of the monetary policy assessment and provide our view of the economic and monetary situation,” he said on Wednesday. “The new summary will present the main points from the Governing Board’s discussions. It aims to promote a better understanding of how we apply our monetary strategy to the situation in hand.”

The summary will likely stop short of the details of decision-making provided by minutes from peers such as the Federal Reserve and the Bank of England, or the so-called account of the European Central Bank. The SNB’s policy that officials unify messaging publicly means their deliberations will be presented “collectively.”

“More transparency is not always better,” Schlegel said. “It is essential that the Governing Board can conduct open discussions during its monetary policy assessments. Reporting on these discussions must not discourage any participant from expressing their views freely.”

Even so, at first glance the move appears groundbreaking, both for a country where decision-making often takes place away from the public gaze, and for an institution that has often appeared to make a virtue of opacity. It is likely to be the culmination of years of debate within the SNB’s walls over how much information to share in the open.

Dominic Bunning, head of G10 FX strategy at Nomura International Plc, said the extra information could give investors a better sense of how the SNB is managing trade-offs between low inflation, currency strength, and a potential move to negative rates.

“I’m excited,” he said. “Given how much of a role FX plays in the SNB’s decision making relative to other central banks, the recent proclivity of the SNB to surprise consensus — I count 4 surprises on policy rates in the last eight decisions — and the overall lack of communication the market receives from the SNB, this should be a welcome development for currency market participants.”

The move to publish a summary may be Schlegel’s biggest step so far to alter the regime of his predecessor, Thomas Jordan, who left almost a year ago. Asked publicly in May 2024 whether the SNB should stick with its existing approach on transparency, the then-president said that “I’m personally convinced that this is right for our situation.”

What Bloomberg Economics Says…

“The move marks a notable shift for the SNB, boosting transparency and accountability just as the threat of deflation looms and tough policy choices lie ahead.”

—Jean Dalbard, economist. For research on Switzerland, click here

“Jordan left himself some leeway to surprise markets and that was especially helpful when the SNB intervened in currency markets,” said Philipp Burckhardt, a fixed-income strategist and portfolio manager at Lombard Odier. The planned summary can prepare investors for what the SNB is looking at, but “it also limits its own toolbox and its ability to surprise when necessary,” he added.

Even under Jordan, the SNB gradually began to embrace more open communication. In 2020, officials began publishing quarterly data on interventions rather than just annual tallies. The central bank took a step further in 2022 by doubling the number of its monetary policy press conferences to four per year, in tandem with its decisions, rather than just two.

Schlegel’s speech on Wednesday to bankers in Vezia in southern Switzerland pointed to more changes, with a pledge to publishing slide presentations given by Governing Board members at external events.

The summary may still draw the most attention in markets, offering investors a new quarterly glimpse of policymaking, and with it, a calendar fixture to trade the franc.

Suspense will still surround the first publication in late October, four weeks after the Sept. 25 decision. Schlegel didn’t offer a description of the length of the document that will be released, nor whether it will solely feature the views of the three voting members on the Governing Board — Schlegel, Vice President Antoine Martin and Petra Tschudin — or additionally those of the four alternate officials who serve alongside them.

Schlegel acknowledged that the SNB’s new summary will align with “an international trend,” though he insisted that its approach will remain distinctly Swiss.

“It has become standard practice for central banks to report on their monetary policy discussion,” Schlegel said. “These reports are tailored to the individual central bank. Our summary will reflect our legal and institutional setting and the particular context of Switzerland.”

The decision officials will take this month is likely to prove intriguing for investors to analyze, as officials approach the question of whether to re-introduce subzero borrowing costs to fight slow inflation and a strong currency. If so, the SNB could become the first central bank to go negative again after having returned to positive rates three years ago.

Asked about that prospect, Schlegel insisted that policymakers won’t shirk from cutting below zero.

“If it’s really necessary, we will not hesitate to lower interest rates into negative territory,” he said.

–With assistance from Alice Gledhill and Jan-Henrik Förster.

(Updates with analyst in 10th paragraph.)

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