Central bank independence since the financial crisis: The Swiss perspective

November 9, 2017
CFS Presidential Lectures, Goethe Universität, Frankfurt am Main


The financial crisis presented central banks with significant challenges. They resorted to unconventional monetary policy instruments and expanded their field of operations. As a result, central banks have faced growing criticism. In particular, the question has arisen as to whether their independence is still justified.

The experience of the Swiss National Bank (SNB) since the financial crisis has shown that independence continues to be sensible and necessary; central banks can best fulfil their mandate of ensuring price stability and contributing to the stability of the financial system if they are protected from political pressure.

Central bank independence will only endure as long as politicians and the public are convinced of its benefits. To this end, central banks must fulfil their mandate to the best of their knowledge and ability, while retaining a sense of proportion and a long-term perspective when implementing measures. Not every short-term deviation from an objective requires an activist response. Moreover, central banks must be conscious of their limits and avoid an accumulation of tasks.

For an independent central bank to be perceived as legitimate in a democracy, it must be granted a clear mandate against which its performance can be assessed. However, the environment in which central banks operate is highly complex, and conditions can change rapidly. For this reason, mandates usually only sketch out a framework for central banks' operations. This gives them much-needed flexibility in difficult situations.

As a counterweight to its independence, a central bank has a duty to report on its actions, and the results. Indeed, the SNB has regularly provided detailed reports on matters relating to both monetary policy and financial stability. For example, it has explained the rationale behind deciding to discontinue the minimum exchange rate or introduce the negative interest rate, and how these measures have helped it to fulfil its mandate.

As regards financial stability, the fact that macroprudential instruments often have powerful distribution effects speaks against handing over the entire responsibility for such instruments to the central bank. In contrast to monetary policy, these measures are sometimes targeted at specific sectors and groups, and thus also have fiscal implications. In Switzerland, macroprudential tasks have therefore been divided up between the government, the financial market supervisory authority and the SNB. The SNB is responsible for assessing the systemic importance of banks and financial market infrastructures, and plays a key role in the deployment of the countercyclical capital buffer.

Download file now

The file can be downloaded with the button below.

Additional files

Related content


  • Thomas Jordan
    Chairman of the Governing Board

Your settings

Required: These cookies (e.g. for storing your IP address) cannot be rejected as they are necessary to ensure the operation of the website. These data are not evaluated further.
Analytics: If you consent to this category, data such as IP address, location, device information, browser version and site visitor behaviour will be collected. These data are evaluated for the SNB's internal purposes and are kept for two years.
Third-party: If you consent to this category, third-party services (used, for example, to add social multimedia content to the SNB's website) will be activated which collect personal data, process these data, disclose them abroad - worldwide - and place cookies. The relevant data protection regulations are linked in the 'Privacy statement for the website of the Swiss National Bank'.

Choose your preferred settings:

This website uses cookies, analytics tools and other technologies to provide requested features, content and services, to personalise the content shown, to provide links to social media, and to analyse the use of the website in anonymised form for the purposes of improving usability. Personal data are also disclosed abroad - worldwide - to video service providers and the analytics tools of these providers are used. More information is available under 'Manage settings'.