The Swiss National Bank (SNB) can expand its balance sheet further if needed, says chairman of the board Thomas Jordan.
This content was published on
2 minutes
swissinfo.ch with Bloomberg agency/ug
“A big balance sheet is per se no problem. We can expand the balance sheet further, if monetary policy so requires,” he told the Neue Zürcher Zeitung newspaper in an interview published on Saturday.
The SNB’s holdings of foreign exchange have ballooned to more than CHF900 billion ($1.1 trillion) due to its long-running campaign to weaken the franc via interventions. That practice not only drew scrutiny from the United States Treasury — the central bank’s huge pile of assets also exposes it to big swings in prices.
The franc is still highly valued, and inflation is just slightly below zero, according to Jordan. Still, “we only intervene as needed.”
He also rejected focusing monetary policy more closely on the exchange rate and said there still was a lot of slack left in the economy.
“It would be completely premature to begin shrinking the balance sheet and tightening monetary conditions,” he said. “It would be wrong to signal to the world now that the SNB will be the first central bank to usher in a restrictive policy.”
Asked whether the SNB was prepared to accept an inflation rate of 2% and more, similar to the US central bank, Jordan said every country was faced with a different situation.
“History has taught us a lesson: A recession is most likely if inflation gets out of control and measures are needed to fight it.”
It’s preferable to stabilise increasing prices at a maximum rate of 2%, he added.
University students in Switzerland join Gaza protest wave
This content was published on
Pro-Palestinian activists occupied university buildings in Lausanne, Geneva and Zurich on Tuesday, widening the protest movement in the Alpine nation.
TradeXBank to resume full operations after Sberbank Switzerland taken off sanctions list
This content was published on
TradeXBank, the former Swiss branch of Russia’s Sberbank, will be able to resume its dollar-denominated activities from the second half of this year.
Geneva decides not to remove controversial memorials
This content was published on
The city of Geneva has presented an action plan regarding a series of controversial local statues and monuments of historical figures linked to racism, colonialism or slavery.
University of Lausanne calls for end to pro-Palestine sit-in
This content was published on
The pro-Palestinian occupation continues at the University of Lausanne (UNIL). On Monday evening, a group of students refused to agree to the deadline set by the rectorate.
Ukraine peace conference should include Russia, says Chinese ambassador
This content was published on
China supports a peace conference on the Ukraine war that would see equal participation of all parties, says Chinese Ambassador to Russia Zhang Hanhui.
This content was published on
A majority of Swiss citizens have open attitudes towards various infertility treatments, including even egg donation, which is currently prohibited.
Reports of Swiss cyber fraud almost doubled in six months
This content was published on
The head of the new Federal Office for Cybersecurity (FOC), Florian Schütz, has presented a new strategy after just over four months in office.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Swiss and US central banks: same purpose, different paths
This content was published on
Choosing members of the Federal Reserve shows organisational differences between the US central bank and the Swiss National Bank.
SNB chief commends Swiss banks for handling of Covid crisis
This content was published on
Swiss banks have so far weathered the impact of the Covid-19 pandemic well, according to Swiss National Bank chairman Thomas Jordan.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.