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| Home / Information for / Financial markets / Primary market for Swiss Confederation bonds | ||
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Based on art. 5 para. 4 and art 11 of the National Bank Act (NBA), the National Bank shall provide banking services to the Swiss Confederation.
The services will be provided by the National Bank for an adequate compensation. However, the services shall be provided free of charge if they facilitate the implementation of monetary policy. Remunerable services include payment transactions, liquidity management and custody of securities. The details of the services provided and the remuneration were laid down in agreements concluded between the Federal Finance Administration and the National Bank.
Up until the end of 2004, the confederation held its liquid funds in the form of sight deposits or short-term time deposits at the National Bank. In the event of liquidity shortages, the National Bank arranged money market loans from banks for the Confederation. The National Bank pays interest at market rates on time deposits held with it by the Confederation, while sight deposits are interest bearing up to a certain level. Swiss Post places its liquid funds directly in the money market.
In 2010, the SNB issued both money market debt register claims (MMDRCs) and Confederation bonds on behalf of and for the account of the Confederation. MMDRCs amounting to CHF 76.7 billion were subscribed, of which CHF 33.7 billion was allocated. The corresponding figures for Confederation bonds were CHF 6.8 billion and CHF 4.1 billion respectively. The auction procedure was used for these issues.
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