The Swiss franc and the financial market crisis
Thomas Jordan, Member of the Governing Board of the Swiss National Bank
Kapitalmarktforum 2009 der WGZ-Bank Luxembourg SA Luxembourg, 24/25 September 2009, 25.09.2009
Complete text in German: "Der Schweizer Franken und die Finanzmarktkrise"PDF (477 KB)
The Swiss franc plays a key role in the development of the Swiss economy. Through the competitiveness of our export pricing, it impacts on our exports and consequently affects the business cycle. Via import prices, it has a direct impact on consumer prices. In addition, the Swiss franc has been – and still is – a factor in the success of the Swiss financial sector. The Swiss National Bank (SNB) takes the exchange rate into account in its monetary policy although it does not normally exert any direct influence on it. In the past, it has only been in rare emergency situations that the SNB has intervened to directly influence exchange rate developments. However, from March 2009, the appreciation in the Swiss franc induced by safe haven effects, in an exceptionally difficult economic situation entailing deflation risks, prompted the SNB to prevent an appreciation in the Swiss franc against the euro by purchasing foreign currency.
Prior to the financial market crisis, the Swiss franc’s safe haven role was frequently questioned, due to the fact that, for many years, the Swiss currency had not experienced any crisis-induced waves of appreciation. The crisis has shown that the Swiss franc still has a safe haven status. Moreover, this works both ways – the weakening of the Swiss franc prior to the financial market crisis was probably not least a result of declining risk aversion and thus a drop in demand for a safe haven. The SNB policy of becoming active in the foreign currency market in emergency situations has not damaged the international role of the Swiss franc or the interest rate bonus.