Switzerland emerged as a “model student” at the spring meeting of the International Monetary Fund and World Bank, according to finance minister Ueli Maurer, who highlighted its debt and currency management models at the gathering of global leaders.
In particular, Maurer said after attending the meeting in New York that Switzerland’s debt brake – which requires federal spending to be linked to revenues in the budget process – could serve as a model for other countries.
“We believe that a clear national fiscal policy is the basis for economic growth,” Maurer said. But he acknowledged that global risks such as commodity prices, terrorism and migration issues are nevertheless affecting the world economy and stagnating growth.
The finance minister also noted that the American justice department and the Swiss banking sector have reached an era of détente, with Swiss-American relations over banking issues having greatly improved.
“We have, once again, found a culture of dialogue,” Maurer said.
Negative interest – sharing experiences
Thomas Jordan, the head of the Swiss National Bank, was also present at the IMF and World Bank meetings and spoke on the issue of the overvalued Swiss franc. Jordan said the currency’s overvaluation has put Switzerland in a delicate situation and led to the SNB being a pioneer in implementing negative interest rates.
Jordan said that pioneering role had attracted much interest from around the world and that the practice has enabled the SNB to stem the flow of capital into Switzerland. It also seemed to have little influence on mortgage interest rates, he said, and has been an overall positive experience in the case of Switzerland.
Panama papers front and centre
The recent Panama papers revelations of vast offshore accounts overshadowed many talks at the meeting, and Maurer said that justice authorities needed to act on any indication that crimes had occurred. He also said that his department is prepared to act if necessary.
Earlier this month, following the Panama papers’ release, Maurer had said that there was no need for further regulation of offshore banking activities in Switzerland.
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