Analysis to monetary policy, The SNB needs to be more tunAngesichts of the consequences of the Corona-crisis, Economists and politicians for a stronger commitment from the national Bank. The game room is bigger than Thomas Jordan is shown.Opinion Markus Diem Meier0 KommentareDie national Bank contribute little to the management of the crisis: This accusation leads to President Thomas Jordan in order to Ensure the independence of the Institute.Photo: Anthony Anex (Keystone)

Thomas Jordan is Worried. In an online event, the UBS, the President of the Swiss national Bank has emphasized on Wednesday the importance of the independence of his institution so often that you might believe that it is acutely

the Background of his Concerns are not only the international blurring of the lines between state finances and the creation of money by the Central banks threatened. Also in Switzerland, the SNB is coming under increasing pressure to afford given the high cost of the crisis and its gigantic balance sheet a greater contribution.

investment, especially abroad

According to Friday’s Figures published in the balance sheet of the national Bank in April, has grown to more than 50 billion to 903,5 billion Swiss francs, more. They are currently invested via purchases of foreign Currency, mainly money abroad. So she is braced against a further appreciation of the Swiss franc. This year alone it has bought around 80 billion Swiss francs of foreign exchange.

The total foreign exchange assets amount to the end of April to about 812 billion Swiss francs. 20 percent of which has been invested in the national Bank in foreign stocks, 69 percent of them in state bonds of other countries. While the national Bank lends to other countries, huge amounts of money, there is a growing hole in the state Treasury of Switzerland.

“in My opinion, a direct support of the unemployment insurance would have a bigger effect on the economy as foreign exchange market interventions without a clear goal,” says Daniel Kaufmann, a Professor of Economics at the University of new castle.

With Doubt as to the effectiveness of the previous approach of the national Bank is a merchant is not alone. Recently it was speculated on financial portals even you a run due to the high price of their interventions a Euro limit, but unlikely.

money for the unemployment insurance required

The proposal, the national Bank is to introduce a date to be determined by your self-contribution in the current exceptionally heavily loaded funds the unemployment insurance, has a businessman together with Jan-Egbert Sturm and Alexander Rathke of the business cycle research at the ETH published.

But in Parliament, several initiatives with respect to the center of the national Bank are pending. The green national Council Gerhard Andrey calls in several Initiatives to significantly higher profit distributions by the SNB than previously. You do not take on the individual Initiatives position, i.e. to the various claims at the national Bank.

Jordan’s argument does not stand in a point

In Interviews made by President Thomas Jordan, and Board member Andrea Maechler apparent, however, that you will ask about the applicable scheme of distribution of profits, there is no money available. Against further payments as Jordan has argued, moreover, that his Institute would need to sell foreign currency investments. This would lead to an undesirable appreciation of the Swiss franc, and against the SNB’s monetary policy speak of this.

However, the national Bank is quite larger payouts, with no foreign exchange could make sales. A transfer from your equity to the accounts of the public Hand would suffice. New Swiss francs can you create anyway.

But if the SNB does not want to, use all interventions, nothing. Neither the Federal Council nor the Parliament can prescribe something. The only way an amendment of the law would be. But currently no one wants to go: “Our goal is not a Change in the national Bank act,” says Gerhard Andrey: “But we want to be able to lead the discussion on the high profit reserves and the role of the national Bank in view of Covid-19 open.”

The Previous is not enough

This discussion will have the SNB offices. Thomas Jordan is right, the SNB’s independence is especially important now. Because there is concern that States might want to go through the creation of money by Central banks, of their debts, get rid of is. Fades in the result, the confidence in money and rising Inflation is damaging to all.

But, given the Severity of the crisis, the national Bank comes around this time hardly about to give in to the demands for better and more in-depth answers than in the past – and to bolster where possible, more than before, with a support to accommodate – in the sense of the proposal of the Economists, the unemployment insurance. Thus, the independence of the Central Bank would continue to be respected.

The national Bank is a public Institution, and their reserves are in a consolidated viewing is part of the public finances. Their independence reflects the will of the Swiss population, as expressed in the national Bank act and the Constitution. This will and so that the rules can change again.

It is therefore in the interest of the national Bank, once again on the books, and to consider exactly where you are even more could help to overcome the crisis, without compromising proven principles.

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