Swiss National Bank (SNB) Goals and responsibilities of the Swiss National Bank

Goals and responsibilities of the Swiss National Bank

Mandate

The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by Constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.

Price stability

Price stability is an important condition for growth and prosperity. Inflation and deflation, by contrast, impair economic activity. They are inhibiting factors for the decisions of consumers and producers, lead to misallocations of labour and capital, result in income and asset redistributions, and put the economically weak at a disadvantage.

The National Bank equates price stability with a rise in the national consumer price index of less than 2% per annum. Deflation, i.e. a protracted decline in price levels, is considered to be equally detrimental to price stability. The SNB takes its monetary policy decisions on the basis of an inflation forecast and implements them by steering the three-month Libor for Swiss franc investments.

Supplying the money market with liquidity

The National Bank provides the Swiss franc money market with liquidity by influencing the interest rate level in the money market.

Cash supply and distribution

The National Bank is entrusted with the note-issuing privilege. It supplies the economy with banknotes that meet high standards with respect to quality and security. It is also charged by the Confederation with the task of coin distribution.

Cashless payment transactions

In the field of cashless payment transactions, the National Bank provides services for payments between banks. These are settled in the Swiss Interbank Clearing (SIC) system via sight deposit accounts held with the National Bank.

Investment of currency reserves

The National Bank manages currency reserves. These engender confidence in the Swiss franc, help to prevent and overcome crises and may be utilised for interventions in the foreign exchange market.

Financial system stability

The National Bank contributes to the stability of the financial system. Within the context of this task, it analyses sources of risk to the financial system, oversees systemically important payment and securities settlement systems and helps to promote an operational environment for the financial sector.

International monetary cooperation

Together with the federal authorities, the National Bank participates in international monetary cooperation and provides technical assistance.

Banker to the Confederation

The National Bank acts as banker to the Confederation. It processes payments on behalf of the Confederation, issues money market debt register claims and bonds, handles the safekeeping of securities and carries out money market and foreign exchange transactions.

Statistics

The National Bank compiles statistical data on banks and financial markets, the balance of payments, the international investment position and the Swiss financial accounts.