The SNB's role in financial market regulation
Niklaus Blattner, Vice Chairman of the Governing Board
Management Forum 2003 of the Cantonal Banks, Fürigen (Canton of Nidwalden), 9 September 2003, 09.09.2003
In the last few years, maintaining the stability of the financial system has become a major concern of central banks. The Swiss National Bank (SNB), too, has committed itself to system stability. In line with its monetary policy mandate, it concentrates mainly on the banking system as well as on payment and settlement systems.
The SNB makes a significant contribution to system stability on different levels, basing its efforts on three pillars: information, financial market regulation and active crisis management. The SNB plays a preventive role by identifying imbalances in the financial system and by making its analyses and assessments available to the public (pillar 1). Furthermore, it participates in reforming financial market regulation and oversees payment and settlement systems (pillar 2). If a crisis is at hand nonetheless, the SNB has the possibility to provide liquidity assistance (pillar 3).
In “times of uncertainty”, a stable financial system, i.e. one that can absorb shocks and emerge unscathed, is of particular importance. If the financial market regulation proves adaptable with regard to the changed market environment, new challenges can be tackled. Financial market reforms not only serve system stability, however; through the creation of favourable general conditions, the competitiveness of Switzerland as a financial centre is also strengthened.
As long as the financial system continues to be faced with new challenges that need to be considered in overseeing the financial market, resting on one's laurels is not a good idea.