National Bank explains its monetary policy – A clear ‘ no ‘ to the PolitikBei the semi-annual press conference on the monetary policy issued by the national Bank President Thomas Jordan calls for additional money sources of a discharge. These are the main six points.Markus Diem Meier26 Kommentare26Steht under increasing pressure from the policy: the national Bank President Thomas Jordan declared its monetary policy and respond to questions from the press representatives.Photo: Anthony Anex (Keystone)1. What was the decision of the national Bank?
In its monetary policy the national Bank shall, in accordance with their assessment of no Change. Your interest rate remains at minus 0.75 percent. In addition, you want to intervene further in the currency markets if the Swiss franc is once again under appreciation pressure. President Thomas Jordan stressed that the willingness of the SNB intervention is even increased. An impression of the extent of the sight Deposits in national Bank, over which the national Bank conducts interventions. Since the beginning of the year the assets of the banks rose by about 95 billion Swiss francs. At the end of April the foreign exchange reserves of the national Bank amounted to 811,8 billion Swiss francs. Thus, they accounted for around 90 per cent of their balance sheet.
After all, the sight Deposits fell in the last two weeks. Thomas Jordan cited as a reason for the recent decline in the upward pressure on the Swiss franc. The highly expansionary monetary policy had to be maintained, the SNB but due to the current severe economic crisis and the low Inflation. According to the SNB, the price level will rise until the year 2022 and again to just 0.2 percent on average. Prior to that, it will fall due to the crisis to 1.2 percent (in current quarter). The price of stability, committed to the Bank, equates with an Inflation of 2 percent.
2. How does the national Bank’s position on the recent claims from the policy?
questions of journalists Thomas Jordan took to Initiatives, also aimed at the money of the national Bank. Only on Wednesday, a majority in the national Council supported two concerns in this context, the parliamentarians adopted a proposal according to which the revenues of the national Bank negative interest rates to the OASI benefit. The second is also a majority supported proposal is to require that the share of the SNB’s profits, flows in the future to the Federal government, is mandatory used for the removal of the debt from the Corona-crisis. The Federal government receives one-third of the paid SNB-profit, the cantons of the Rest.
With a view to the latter proposal, Jordan said, that it is the responsibility of the Confederation or the cantons to be, how you deal with the money transfers, the national Bank, in the framework of the agreed dividends. Additional services Jordan, but refused categorically. Without a Change in the law or the Constitution of another is Contrary, not possible, he added.
Haunting Jordan warned also, by the Central Bank, additional funds demand over and above the previous agreement regarding the distribution of profit also. According to this it pays to the national Bank, depending on the result of a maximum of 4 billion Swiss francs. The Central Bank should be required to Deposit more money in the state budget, threatened to dangerous conflicts of interest between the needs of monetary policy and the Wishes of the policy, warned Jordan.
3. Why, Thomas Jordan, is fighting against a withdrawal of the profits from negative interest rates?
The Central Bank chief argued that it makes little sense to be only a single Item out. In addition, the exact gain of negative interest rates is difficult to calculate. The reasonable Jordan that the SNB will not only get negative interest rates from the banks, but also such interest, in some cases, self-pay. So, banks get liquidity from the Central Bank and (in the case of emergency loans under 500’000 Swiss francs), interest-free and due to the Federal hedged to companies as loans from the national Bank with a negative interest rate of minus 0.75 percent.
4. How does the national Bank to provide support to the banks?
According to Thomas Jordan, the SNB is funded with 10 billion Swiss francs, around two-thirds of all the Covid-loans to the banks guaranteed by the Federal government to 100 percent (loans of up to 500’000 Swiss francs) or 85 percent (higher loans). 0.75 percent on the 10 billion, equivalent to 750 million Swiss francs, received by the banks. However, you have to pay on their deposits with the national Bank imposed a negative interest rate. However, this strain has reduced the national Bank for the first time last November and again in March. Both of these reductions lead to a discharge to the banks of around 1.6 billion Swiss francs. The national Bank justified this support of the banks so that they would have more possibilities to Finance the company and also not to charge to small customers with negative interest rates.
5. How does the national Bank of the economic situation?
The Swiss economy is, according to the SNB in a sharp recession. The gross domestic product will plummet to your assessment in the current year by 6 per cent. So it come to the worst economic downturn since the oil crisis in the 1970s. After all, the economy would have been activity with the easing steps since may, again a little revived. This is likely to continue to do so. Distressing the situation in the world economy, however, remains according to the assessment of the SNB. In spite of a significantly positive growth in the next year, the SNB expects the Swiss economy will soon reach again the level before the crisis.
6. What are the most important messages from the financial stability report?
Also in the report on the stability of the Swiss financial centre, the Covid crisis takes a big weight. According to the national Bank, this pushes strongly on the profitability of the banks. Since the financial crisis, increased capital buffer would be now but for the stabilization of institutions and the financial system as a whole as useful. Finally, it should be evident, in spite of the crisis, there is also no shortage of credit supply in that area where the loans are not guaranteed by the Federal government. However, the SNB notes that banks have tightened the conditions for loans.
the real-estate market, the crisis is, according to the report, an additional challenge. The recession and the growing unemployment could lead to the assigned mortgage for households or businesses would no longer be portable. The sustainability risks had increased in the recent past already. In other words, the risk of loss from mortgage have increased for the banks.
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