The Swiss National Bank - continuity and change in eventful times

Jean Studer, President of the Bank Council

111th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 26.04.2019

The Swiss National Bank (SNB) has developed and evolved over recent years in a constantly changing environment. These changes were triggered by the financial crisis which started in the US and then spread around the globe. When the financial crisis morphed into a debt and, ultimately, a euro crisis, the SNB decided to deploy various instruments to protect Switzerland's economy against excessive Swiss franc appreciation. These included the minimum exchange rate against the euro, and later the negative interest rate and the SNB's willingness to intervene in the foreign exchange market as necessary.

More staff had to be hired in both operational and support units in order to handle the SNB's new - or expanded - range of tasks. Changes made to the organisational structure have ensured that the SNB can also function effectively and efficiently as a considerably larger organisation. The Bank Council has closely monitored the SNB's growth and evolution. As a supervisory body, it is responsible for passing the annual budget; it also takes note of the SNB's resource management strategies and initiates regular reviews. Moreover, the Bank Council is charged with laying down the SNB's basic organisational structure.

Not only has the SNB grown as an institution, but its balance sheet has also expanded significantly. Foreign exchange market interventions have caused the foreign exchange reserves to increase substantially, which in turn has thrown the importance of managing these assets into sharp relief. The Governing Board is responsible for selecting which asset classes and currencies are permitted, and how the investments are allocated. For its part, the Bank Council is responsible for overseeing the investment of assets and risk management. The expansion of the balance sheet likewise made it necessary to strengthen equity capital over the long term by setting aside provisions. The Bank Council therefore decided to supplement the existing provisions rule with an annual minimum allocation.

Through all these changes, one thing has remained constant: the SNB's statutory mandate to conduct monetary policy in the interests of the country as a whole. This undertaking lies at the heart of everything the SNB does. Ultimately, the changes of the last few years have also been aimed at fulfilling this overarching mandate in the best way possible.