Does the SNB have the right to act alone?

Does the SNB have the right to act alone?

"How can it be legally possible for the Swiss National Bank to decide on its own to deprive tens or even hundreds of thousands of people of their job opportunities, without even referring to the government of our country or to the parliament elected by the people?

Ben, Neuchâtel

Article 99 of the Federal Constitution establishes as a fundamental principle that the Swiss National Bank must conduct a monetary policy that serves the general interests of the country.

Article 5 of the Federal Act on the Swiss National Bank states that the SNB's primary task is to ensure price stability, taking account of economic developments. To this end, it provides the Swiss franc money market with liquidity, manages currency reserves and contributes to the stability of the financial system.

The SNB therefore believes that, in accordance with the Constitution and the law, it must give priority to price stability, which is an important prerequisite for growth and prosperity. The SNB believes that inflation and deflation hamper economic development by complicating decision-making for consumers and producers, leading to a misallocation of labour and capital and penalising the economically weaker players. The SNB is therefore endeavouring to contain the annual rise in consumer prices by not exceeding the 2% mark. In the SNB's view, a lasting fall in the price level, i.e. deflation, must also be avoided.

As has been well explained in recent days, the massive purchases of euros required to defend the floor rate that has been in place for over 3 years have necessitated the issue of large quantities of Swiss francs by the SNB on behalf of the Confederation. This mechanism is apt to generate inflation. In deciding to put an end to this mechanism, the National Bank has therefore complied with the priority mission assigned to it by the legislator. It should also be emphasised that the same legislator has enshrined in articles 6 and 7 of the National Bank Act that the National Bank and the members of its organs may neither seek nor accept instructions from the Federal Council, the Federal Assembly or other bodies in the performance of its tasks. This independence does not prevent the Federal Council and the National Bank from informing each other of their intentions before taking important decisions on economic and monetary policy, and it will not have escaped you that our government has not criticised a choice that will certainly be temporarily painful for many companies.