“The SNB should be more transparent”: Criticism from the SNB-Observatory

"The SNB should be more transparent": Criticism from the SNB-Observatory

Little is known about what goes on behind the facade of the SNB headquarters in Zurich. Keystone/Michael Buholzer sda-ats

This content was published on December 14, 2022 at 4:00 pm


The Swiss National Bank (SNB) should be more transparent, its intentions are not clear: the group of economists working under the name SNB-Observatory (SNB’s observatory) has been criticized.

In a study published today – on the eve of decisions tomorrow by the Thomas Jordan-led institution – experts say the SNB theoretically has two options to combat inflation: on the one hand it can continue to raise interest rates. On the other hand, it would have the option of reducing its balance sheet by selling foreign assets and allowing the franc to strengthen.

“These are two extreme positions: of course it can use a combination of both instruments,” said Uan Lengwiler, a professor at the University of Basel, a former adviser to the SNB and a former member of Finma, the Swiss federal supervisory authority, on a conference call on financial markets.

The problem, in the specialist’s eyes, is that the SNB’s policy is currently unclear. Top officials at the firm want to focus on interest rate maneuvers, but at the same time the bank’s statistics point to asset sales. “More clarity on the SNB’s monetary policy intentions would be welcome,” the research reads.

The choice of the entrepreneurial path is by no means secondary: for example, the strategy of reducing the budget will increase the strength of the franc and destroy the export economy, but it will benefit consumers, the SNB-Observatory points out. In addition to Lengwiler, professor emeritus Charles Wiplos from Geneva, Stefan Gerlach, chief economist of private bank EFG (acquired by Lugano-based BSI six years ago) and former deputy governor. of the Irish Central Bank.

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