Central Bank of Switzerland

Group 2 – FIN191
 History of Central Bank of
Switzerland
• The bank formed as a result of the need for a reduction in the
number of banks of issue, which numbered 53 sometime after
1826. In the 1874 revision of the Federal Constitution it was given
the task to oversee laws concerning the issuing of banknotes.
Then in 1891 the Federal Constitution was revised again to
entrust the Confederation with sole rights to issue banknotes.
The National Bank Law was enforced on 16 January 1906, and the
National bank began business activities on 20 June 1907, and is
thought then founded sometime during either 1906 or 1907.
 Banking in Switzerland
 Banking in Switzerland is regulated by the Swiss
Financial Market Supervisory Authority (FINMA), which
derives its authority from a series of federal statues.
 Swiss Banks have earned a reputation
around the world for providing
sophisticated and discreet
banking services.
 Banking Accounts and Laws
• Swiss Bank Accounts and the Laws Article 47 of the Federal Law,
1934
• In the following cases there is a duty for bankers to provide
information regarding bank account.
– Civil proceedings (such as inheritance or divorce)
– Debt recovery and bankruptcies criminal proceedings (money
laundering, association with a criminal organization, tax fraud,
etc.)
– International mutual legal assistance proceedings
• The Swiss Federal Banking Commission (SFBC) may communicate
information only to the supervisory authorities in foreign countries subject to
three statutory conditions:
• The information given can’t be used for anything other than the direct
supervision of the banks and can’t be passed on to tax authorities.
• The requesting foreign authority must itself be bound by official or
professional confidentiality and be the intended recipient of the information.
• The requesting authority may not give information to other authorities or to
other public supervisory bodies without the prior agreement of the SFBC.
 Reasons behind Banking

Services Security Secrecy

SWISS BANKS are
counted as safest
banks in the world.
 Monetary Policy
• The Swiss National Bank pursues a monetary policy
serving the interests of the country as a whole. It
must ensure price stability, while taking due account
of economic developments. Monetary policy affects
production and prices with a considerable time lag.
Consequently, it is based on inflation forecasts rather
than current inflation.
• The SNB’s monetary policy strategy consists of
three elements: a definition of price stability
(the SNB equates price stability with a rise in
the national consumer price index of less than
2% per year), a medium-term
conditional inflation forecast, and, at
operational level, a target range for a
reference interest rate, which is the Libor for
three-month investments in Swiss francs.
 Governing board

• The Swiss National Bank’s management and executive body is the

Governing Board. The Governing Board is responsible in particular
for monetary policy, asset management strategy, contributing to
the stability of the financial system and international monetary
cooperation. The Governing Board consists of 3 members:
• Chairman: Thomas Jordan
• Vice Chairman: Fritz  Zurbrügg
• Member:  Andréa M. Maechle
 Economy of Switzerland
• In recent years, Switzerland has responded to increasing
pressure from neighboring countries and trading
partners to reform its banking secrecy laws, by agreeing
to conform to OECD regulations on administrative
assistance in tax matters, including tax evasion. The Swiss
Government has also renegotiated its double taxation
agreements with numerous countries, including the US,
to incorporate OECD standards.
• In January 2015, the SNB abandoned the Swiss
franc’s peg to the euro, roiling global currency
markets and making active SNB intervention a
necessary hallmark of present-day Swiss monetary
policy. The independent SNB has has made Swiss
exports less competitive and weakened the
country's growth outlook; GDP growth fell below
2% per year from 2011 through 2017.