Swiss National Bank (SNB)

Overview

The Swiss National Bank (SNB) is Switzerland's central bank, responsible for monetary policy, payment system infrastructure, foreign exchange management, and financial stability oversight. Established in 1907, the SNB operates as a special-statute joint-stock company with a unique public-private hybrid structure, distinguishing it from purely state-owned central banks. The institution is listed on the SIX Swiss Exchange, making it the only publicly-traded central bank globally.

Current Leadership: Martin Schlegel serves as Chairman of the Governing Board of the Swiss National Bank. Schlegel was appointed to this position effective October 1, 2024, succeeding Thomas Jordan who served as Chairman and leading SNB through the 2008 financial crisis and subsequent regulatory developments. Schlegel brings extensive experience in banking and financial regulation.

Unique Institutional Structure: The SNB maintains a distinctive public-private structure uniting elements from both private and public law. Approximately 51% of SNB shares are held by cantons (Swiss regional governments), cantonal banks, and other public authorities and institutions. The remaining shares (approximately 49%) are held by private individuals and legal entities in Switzerland and abroad. This structure balances public interest representation with private sector participation and ensures profits accrue primarily to the public sector rather than shareholders. Shareholders may receive dividends only up to a maximum of 6% annually, with remaining profits allocated to the federal government or special reserves.

Market Listing: The SNB is listed on SIX Swiss Exchange under the ticker symbol SNBN, making it publicly-traded and subject to standard corporate governance and disclosure requirements. This unique arrangement provides transparency and market discipline while maintaining central banking independence.

Basic Identity

• A bank for central banks, providing banking |

Classification

Inclusion Justification

What This Entity Oversees

Payment Systems Oversight and Infrastructure

The SNB operates critical payment and settlement infrastructure and oversees the systemic importance of private payment systems:

SIC System (Swiss Interbank Clearing)

The Swiss Interbank Clearing (SIC) system is the real-time gross settlement (RTGS) system for Swiss franc payments, operating under SNB oversight and operated by SIX Interbank Clearing Ltd on behalf of the SNB.

System Characteristics:

• Settlement Mechanism: SIC operates as a RTGS system where payment orders are executed individually, irrevocably, and with finality in SNB-issued central bank money in real time.
• Liquidity Management: Participants maintain settlement accounts at the SNB, accessing liquidity through RTGS accounts or integrated payment (IP) settlement accounts.
• Systemic Importance: SIC processes daily payment turnover exceeding CHF 386 billion, making it systemically important to Switzerland's financial functioning. The SNB classifies SIC as a systemically important financial market infrastructure (FMI) under the Financial Market Infrastructure Act (FinMIA).
• Operational Standards: SIC maintains high operational resilience with 99.5%+ uptime, redundant systems, and disaster recovery arrangements. The SNB supervises SIC compliance with FinMIA requirements.

SIX Settlement Infrastructure

The SNB oversees the SIX Group's settlement infrastructure including:

• SIX SIS Ltd: The central securities depository (CSD) handling securities settlement for Swiss and international securities.
• SIX x-clear Ltd: The clearinghouse providing clearing services for derivatives and other instruments.
• Settlement Finality: The SNB ensures settlement finality through statutory protections preventing reversal of settled transactions.

Oversight Authority

Under the Financial Market Infrastructure Act (FinMIA) and the National Bank Ordinance (NBO), the SNB exercises oversight authority to ensure:

• Operational resilience of systemically important FMIs;
• Compliance with international standards (CPMI-IOSCO standards for payment systems);
• Adequate risk management and governance frameworks;
• Participant access criteria ensuring fair and transparent admission;
• Business continuity and disaster recovery capabilities.

The SNB's sole oversight objective is ensuring financial stability and supporting the effectiveness of monetary policy.

Foreign Exchange and International Reserves Management

The SNB manages Switzerland's foreign exchange reserves and executes foreign exchange policy supporting economic stability:

Foreign Exchange Reserves – The SNB maintains foreign exchange reserves exceeding USD 800 billion (as of 2025), comprising diversified holdings in major currencies, gold, and international securities. The reserves provide:

• Liquidity for foreign exchange interventions supporting monetary policy;
• Crisis support for the Swiss financial system;
• International confidence in Swiss franc stability;
• Assets supporting SNB balance sheet strength.

Foreign Exchange Interventions – The SNB may intervene in foreign exchange markets to:

• Moderate exchange rate volatility that threatens price stability;
• Support export competitiveness during periods of excessive franc appreciation;
• Influence monetary conditions when interest rate policy is constrained (zero lower bound);
• Manage systemic risks from exchange rate pressures.

Gold Holdings – The SNB maintains significant gold reserves (approximately 714 million fine troy ounces), reflecting both historical accumulation and strategic reserve positioning. Gold serves as a confidence anchor and safe-haven asset during global financial stress.

International Coordination – The SNB coordinates foreign exchange policy with other central banks and finance ministries through:

• Regular bilateral consultations with major central banks (US Federal Reserve, ECB);
• G10 central bank coordination;
• IMF engagement on exchange rate policies affecting global financial stability;
• International agreements on foreign exchange conduct (e.g., US-Swiss statement on foreign exchange matters).

The SNB contributes to financial stability through multiple mechanisms:

Systemic Risk Assessment – The SNB continuously monitors financial system vulnerabilities including:

• Credit risk concentration in the banking sector;
• Asset price imbalances and valuation risks;
• Foreign exchange and funding risks;
• Cross-border linkages and contagion risks;
• Emerging vulnerabilities in shadow banking and non-bank financial intermediaries.

Macroprudential Policy Coordination – The SNB coordinates with FINMA and the Federal Department of Finance (FDF) through the Swiss Financial Stability Council (SFSC) to implement macroprudential measures including:

• Countercyclical capital buffer activation during credit booms;
• Systemic risk buffer requirements for major banks;
• Leverage ratio requirements;
• Large exposure limits;
• Liquidity requirements (LCR, NSFR).

Emergency Liquidity Assistance (ELA) – The SNB maintains authority to provide emergency liquidity assistance to solvent but illiquid institutions during financial stress. ELA is discretionary, subject to collateral requirements and typically at penalty rates, ensuring it remains a backstop measure rather than a substitute for prudent risk management.

Crisis Management Authority – The SNB participates in financial crisis resolution through:

• Coordination with FINMA on bank resolution and emergency assistance;
• Provision of emergency funding during systemic stress (as demonstrated during the 2008 financial crisis and 2023 banking stress);
• Engagement with the Federal Department of Finance on extraordinary government measures when necessary.

Regulatory Powers

While the SNB does not directly supervise individual banks (FINMA's responsibility), the SNB maintains enforcement authority over payment system participants and FMI operators:

Payment System Participation Requirements – The SNB establishes criteria for participation in the SIC system, including:

• Minimum capital and liquidity standards;
• Operational risk management requirements;
• Business continuity and disaster recovery capabilities;
• Compliance with SNB operating rules and procedures;
• Regular compliance certifications and audits.

FMI Oversight Enforcement – The SNB can:

• Require remedial actions from FMI operators failing to meet FinMIA standards;
• Impose operational restrictions if systemic risk emerges;
• Revoke system access for participants in chronic breach of requirements;
• Coordinate with FINMA on enforcement of prudential standards affecting FMI resilience.

Regulatory Directives – The SNB issues binding directives to FMI operators and payment system participants requiring compliance within specified timeframes. Failure to comply triggers escalation to FINMA or other authorities.

Regulatory Role and Function

Legal Foundation

The SNB's authority derives from Switzerland's constitution and specialized financial legislation:

Constitutional Foundation

Federal Constitution Article 99 – Article 99 of the Swiss Federal Constitution (adopted 1999) establishes the constitutional basis for Swiss currency and SNB operations. The article stipulates that money and currency are federal matters under exclusive Confederation authority. Critically, Article 99 mandates that:

• The Confederation has the exclusive right to issue coins and banknotes;
• The SNB is responsible for pursuing a monetary policy serving Switzerland's overall interests;
• The SNB must fulfill this mandate as an independent central bank;
• The SNB is administered with the cooperation and under the supervision of the Confederation (Federal Council and Parliament).

This constitutional framework provides democratic legitimacy while protecting SNB operational independence from day-to-day political interference.

National Bank Act (NBA)

The National Bank Act (NBA) of October 3, 2003, entered into force May 1, 2004, serves as the primary statutory framework governing SNB operations. The NBA defines:

Mandates and Objectives – The SNB's core mandate is to contribute to the stability of the Swiss financial system through:

1. Conducting monetary policy in the interests of the country;
2. Ensuring price stability while supporting overall economic policy objectives;
3. Managing the SNB's balance sheet, foreign exchange reserves, and gold holdings;
4. Operating and overseeing critical payment system infrastructure;
5. Serving as banker to the Swiss government and other public institutions.

Central Bank Functions – The NBA grants the SNB exclusive authority to:

• Issue Swiss franc banknotes and coins;
• Conduct open market operations (OMOs) via repo transactions, foreign exchange swaps, and other liquidity management tools;
• Implement the discount rate and other monetary policy instruments;
• Maintain minimum reserve requirements for commercial banks;
• Serve as a bank to banks, providing liquidity and settlement services.

Financial Stability and Macroprudential Authority – The NBA establishes SNB authority to contribute to financial stability through:

• Oversight of systemic payment and settlement infrastructure;
• Coordination with FINMA on bank-specific prudential supervision;
• Provision of emergency liquidity assistance (ELA) to solvent but illiquid institutions during crises;
• Participation in systemic risk assessment and macroprudential policy development.

Organizational and Governance Framework – The NBA establishes SNB's organizational structure including the Governing Board (executive management), the Board of Directors (oversight), and the General Meeting of Shareholders (ultimate governance body). The Act defines accountability mechanisms, reporting requirements, and independent audit standards.

Licensing and Authorization Relevance

The Swiss National Bank (SNB) is a key licensing authority in Switzerland's financial system:

The licensing process typically involves assessment of capital adequacy, fitness and propriety of management, business plan viability, AML/CFT compliance frameworks, and IT systems readiness.

Payments and Money Movement Relevance

The SNB conducts monetary policy to maintain price stability and support overall economic policy objectives:

Price Stability Objective – The SNB defines price stability as a rise in the consumer price index of less than 2% annually over the medium term. This anchors inflation expectations and supports long-term economic planning by businesses and households.

Monetary Policy Strategy – The SNB's monetary policy framework includes:

• Policy Rate: The SNB targets the three-month Swiss franc LIBOR (or successor reference rate), which influences short-term interbank lending rates and broader financial conditions. The policy rate serves as the primary transmission mechanism for monetary impulses.
• Open Market Operations: The SNB conducts OMOs through repo transactions, foreign exchange swaps, and outright securities purchases to inject or absorb liquidity, influencing money market rates and credit conditions.
• Liquidity Provision: The SNB provides liquidity to the banking system through standing facilities including the lombard credit facility (providing secured lending at a penalty rate).
• Quantitative Tools: During periods of very low interest rates, the SNB may implement quantitative easing (QE) involving large-scale asset purchases to further ease financial conditions.

Coordination with Government – The SNB coordinates monetary policy with the Federal Government's fiscal policy through regular consultations, ensuring consistency between monetary and fiscal objectives. However, the SNB maintains operational independence in setting monetary policy without government direction.

Payment Systems Governed or Overseen

Swiss Large-Value Payment Systems (SNB Operation)

SIX Group Coordination (SNB Oversight)

Swiss Domestic Payment Systems

Swiss Integration with European Payment Systems

Statistical Context: Swiss Payment Ecosystem (2024)

SIC Instant Payments Launch (August 2024):

• Sixty-three financial institutions integrated in Phase 1 (95%+ of Swiss retail payments)
• Daily transaction volumes: Exceeded expectations with up to 10,000 transactions daily
• Processing time: 0.2 seconds in SIC system; 10-second end-to-end delivery
• Rollout timeline: Phase 1 complete; remaining banks expected by 2026

TWINT Mobile Payment System:

• Active users: 6+ million (covers ~2/3 of Swiss population)
• Limitation: Does not process real-time; simulates immediacy through pre-financing mechanism
• Market position: Complement to international card schemes and SIC IP

Payment Method Distribution (Switzerland):

• Card payments: High adoption (estimated 60%+)
• Mobile/digital (TWINT): ~15%+ (growing rapidly)
• Bank transfers: Significant share
• Cash: Low usage (consistent with Nordic/Alpine trends; minimal percentage)

Competitive Position:

• SIC IP represents modernization to match SEPA Inst and T2 capabilities
• TWINT as alternative domestic mobile payment solution
• CHF-denominated systems operate independently from EUR infrastructure
• SIX Group as major financial infrastructure operator (global reach)

International Coordination:

• SNB active in CPMI (Committee on Payments and Market Infrastructures) at BIS
• Participation in Basel Committee standards development
• Bilateral arrangements with ECB/Eurosystem for cross-border EUR payments
• Observer status or participation in key international payment standards bodies
• E-krona considerations: Monitoring digital currency developments (SNB exploring similar digital CHF initiatives)

Relationship to Other Regulators

The SNB participates actively in international financial regulation and cooperation:

Bank for International Settlements (BIS)

The SNB has been a participant in the Bank for International Settlements since BIS's founding in 1930 and maintains one of 18 seats on the BIS Board of Directors. The BIS, based in Basel, Switzerland, functions as:

• A bank for central banks, providing banking services to central banks and international organizations;
• A forum for central bank cooperation and policy coordination;
• A host for standard-setting committees including the Basel Committee on Banking Supervision (BCBS);
• A research and analysis center on global financial stability.

The SNB's participation positions Switzerland at the center of global central banking coordination and standards development.

Committee on Payments and Market Infrastructures (CPMI)

The SNB participates in the CPMI, operating under the BIS framework, which establishes global standards and best practices for:

• Payment and settlement systems;
• Central securities depositories and clearing houses;
• Financial market infrastructure resilience;
• Cybersecurity and operational risk management;
• Cross-border payment efficiency (through the Committee's work on improving correspondent banking services).

International Monetary Fund (IMF)

Switzerland has been an IMF member since 1992, with the SNB and Federal Department of Finance jointly managing the relationship. The SNB:

• Provides information to the IMF on Swiss monetary policy, financial conditions, and balance of payments;
• Participates in IMF bilateral surveillance and multilateral monitoring;
• Contributes to IMF technical assistance activities;
• Engages with IMF work on international monetary system stability and foreign exchange regime assessment.

Basel Committee on Banking Supervision (BCBS)

The SNB, through FINMA, participates in BCBS standard-setting for banking regulation. Switzerland hosts BCBS secretariat functions and contributes to development of:

• Capital adequacy standards (Basel III/IV);
• Operational risk frameworks;
• Liquidity requirements (LCR, NSFR);
• Large exposure limits;
• Leverage ratio requirements;
• Standards applicable to systemically important banks.

Cross-Border Central Bank Cooperation

The SNB maintains bilateral cooperation arrangements with major central banks including:

• US Federal Reserve: Reciprocal liquidity swap lines enabling emergency provision of US dollars to Swiss financial system and vice versa. These standing arrangements were activated during the 2008 crisis and 2020 COVID shock.
• European Central Bank (ECB): Cooperation on payment system standards, financial stability assessment, and cross-border settlement arrangements.
• Bank of Japan, Bank of England, Bank of Canada: Bilateral and multilateral coordination on monetary policy transmission, financial stability, and emergency liquidity arrangements.

Financial Stability Board (FSB)

The SNB participates in FSB coordination on:

• Systemic financial stability assessment;
• Implementation of financial reform standards (post-2008 crisis regulatory reforms);
• Macroprudential policy coordination;
• Addressing shadow banking risks;
• Regulatory consistency and monitoring.

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Organization: Swiss National Bank (SNB)

Address: Börsenstrasse 15, 8022 Zurich, Switzerland

Website: https://www.snb.ch/en

Chairman of Governing Board: Martin Schlegel (as of October 1, 2024)

Telephone: +41 44 631 31 11

Email: General inquiries available through SNB website contact portal

Key Divisions:

• Monetary Policy Division
• Financial Stability Division
• Payment Systems Oversight
• Foreign Exchange and Reserve Management
• International Relations

Governing Board Members:

• Martin Schlegel (Chairman)
• Antoine Martin (Vice Chairman)
• Petra Tschudin (Member)

Notes on Naming and Language