The demand for Swiss banknotes: some new evidence

Katrin Assenmacher, Franz Seitz and Jörn Tenhofen



JEL classification
E41, E52

Currency in Circulation, Cash, Demand for Banknotes, Hoarding of Banknotes, Banknotes Held by Non-residents


Knowing the part of currency in circulation that is used for transactions is important information for a central bank. For several countries, the share of banknotes that is hoarded or circulates abroad is sizeable, which may be particularly relevant for large-denomination banknotes. We analyse the demand for Swiss banknotes over a period starting in 1950 to 2017 and use different methods to derive the evolution of the amount that is hoarded. Our findings indicate a sizeable amount of hoarding, in particular for large denominations. The hoarding shares increased around the break-up of the Bretton Woods system, were comparatively low in the mid-1990s and have increased significantly since the turn of the millennium and the recent financial and economic crises.