SNB Move Below Zero Bigger Step Than Normal Cut, Schlegel Tells NZZ
(Bloomberg) — Swiss National Bank President Martin Schlegel said cutting borrowing costs below zero is a more significant move than a reduction above that level, according to an interview in Neue Zuercher Zeitung.
“While we have repeatedly emphasized that the hurdles for reintroducing a negative interest rate are higher than those for a ‘normal’ rate cut in positive territory, we also say that if necessary, we will not hesitate to reintroduce a negative interest rate,” he was cited as saying, echoing earlier comments.
The SNB’s policy rate has been at zero since June, with economists expecting officials to stay on hold through 2027. An account of the central bank’s March decision, published last week, revealed that officials agreed that they should stay on high alert about the strength of the franc and be especially ready to intervene in currency markers if needed.
Faced with haven flows because of the Iran war, Swiss policymakers in early March announced a position of elevated readiness for interventions, something they have since reiterated several times.
In the NZZ interview, Schlegel repeated that stance, but declined to say if the SNB had actually stepped into markets, instead referring to the next scheduled publication of the central bank’s tally in late June.
“When we intervene in the foreign-exchange market, we do so for monetary policy reasons,” he said. “The aim is to prevent a rapid and excessive appreciation of the Swiss franc and thereby ensure price stability. The SNB has never sought to secure an unfair competitive advantage for the Swiss economy or to prevent an adjustment of the balance of payments.”
Turning to the Swiss banking sector, Schlegel commented on the government’s reform package that would force UBS Group AG to fully back its foreign subsidiaries, and would add an extra capital requirement of around $20 billion at the bank’s Swiss unit.
“The proposed measures aren’t extreme,” he said. “Our experts have calculated that — taking reserves into account — UBS already has sufficient capital to meet all of the government’s proposals.”
Asked about UBS’s potential threat to move its headquarters abroad, Schlegel wouldn’t speculate, saying that the impact to Switzerland as a financial center would depend on “what exactly would be relocated.”
“UBS has various legal entities,” he said. “I don’t want to make any predictions, but I would assume that UBS would still conduct a significant portion of its business in Switzerland.”
©2026 Bloomberg L.P.
