Swiss National Bank (SNB)

What Is the Swiss National Bank (SNB)?

The term Swiss National Bank (SNB) refers to the central bank of Switzerland. Founded in 1906, the SNB is located in Berne and Zurich, with six other offices in the country along with a branch office in Singapore. The central bank acts as an independent body, taking charge of the country's monetary policy and ensuring national price stability. The SNB has 13 agencies that maintaining the supply of Switzerland's national currency, the Swiss franc (CHF). The bank is managed by its governing board and is led by chairman Thomas Jordan.

Key Takeaways

  • The Swiss National Bank is the central bank of Switzerland.
  • The bank is responsible for setting the country's monetary policy, ensuring national price stability, and issuing Swiss francs.
  • Operating since 1907, the bank's main offices are in Berne and Zurich.
  • The SNB's bank council oversees and controls its business activities while the governing board oversees asset management, monetary policy, international cooperation, and financial stability.
  • The bank is a joint=stock company, which means it issues shares that are held by state-owned banks and other investors.

Understanding the Swiss National Bank (SNB)

As noted above, the Swiss National Bank is the central bank of Switzerland. It is an independent body that is bound to and abides by the Swiss Constitution to act in the best economic and financial interests of the country and its citizens. The bank's main goal is to ensure the stability of prices and monitoring the nation's economy to allow for growth and development.

The SNB is also responsible for:

  • Implementing monetary policy
  • Issuing and maintaining the nation's money supply, a responsibility it assumed in 1910
  • Participating in the Swiss Interbank Clearing payment system, which facilitates cashless payment transactions
  • Managing the nation's currency reserves
  • Ensuring the stability of the financial system
  • Working with federal authorities in international monetary cooperation

There are two head offices of the SNB, which are located in Berne and Zurich. The bank has six other representative offices, which are located in Basel, Geneva, Lausanne, Lugano, Lucerne, and St. Gallen. The SNB maintains one branch office in Singapore, along with 13 other agencies, which are run by government-owned retail banks.

The bank council is responsible for overseeing and controlling the SNB's business activities. There are 11 members of the council who each serve four-year terms. The full terms can't exceed a total of 12 years. The executive and management body of the bank is called the governing board. This board oversees asset management, monetary policy, along with international cooperation and financial stability in the nation. The board's chairman is Thomas Jordan who was appointed in 2012.

The Swiss National Bank was created in January 1906 as part of the Federal Act on the Swiss National Bank, which is also called the National Bank Act. It officially opened for business the following year in June.

Special Considerations

The Swiss National Bank is a joint-stock company. As such, it issues shares to private and public investors. There are 100,000 shares that are registered, each with a nominal value of CHF 250. Roughly half of the SNB's shares are held by the country's state-owned banks and other public corporations. The remainder of SNB shares is held by private shareholders in the domestic and foreign markets.

Fractional Reserve Referendum

Switzerland operates on a fractional reserve system. This system is referred to nationally as the Sovereign Money Initiative. Banks are required to meet reserve requirements but under this kind of system, only a fraction of bank deposits are guaranteed by the central bank.

As such, banks essentially create money as they lend out more cash than what they actually have in their vaults. The SNB accounts for around 10% of the country's supply of money, with the rest created by lenders in the form of credit.

In June 2018, Switzerland voted on a referendum (known as the Sovereign Money or Vollgeld Initiative) to end the ability of lenders to write loans for more funds than they hold. Fears circulated that if the vote succeeded, it would cause a financial panic or a Brexit-type event. Others feared the passage would place too much power in the hands of the central bank. The referendum failed, with three-quarters of the population voting against any changes to the current policy.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Swiss National Bank. "The SNB." Accessed July 27, 2021.

  2. Swiss National Bank. "Goals and responsibilities of the SNB (overview)." Accessed July 27, 2021.

  3. Swiss National Bank. "Organisation." Accessed July 27, 2021.

  4. Swiss National Bank. "Governing Board." Accessed July 27, 2021.

  5. Swiss National Bank. "Chronicle of monetary events 1848-2021." Accessed July 27, 2021.

  6. Swiss National Bank. "The National Bank as a joint-stock company." Accessed July 27, 2021.

  7. Swiss National Bank. "Questions and answers on the SNB as a company." Accessed July 27, 2021.

  8. Reuters. "Swiss vote on radical sovereign money plan to upend banking system." Accessed July 27, 2021.