The Swiss National Bank SNB needs a new boss after current President Thomas Jordan announced his resignation. Experts at the SNB Observatory are calling for more people to have a say in important decisions in the future. According to the Observatory, someone from outside the SNB should succeed Jordan to bring in new ideas.
After the Chairman of the Board of Directors of the Swiss National Bank SNB Thomas Jordan announced his resignation, the National Bank needs a new boss. And because the National Bank is so important for the financial center and for Switzerland as a whole, experts are also speaking out.
Caption: At the beginning of March, the Swiss National Bank announced that SNB boss Thomas Jordan would step down at the end of September 2024. There was initially no information about a potential successor. Reuters/Denis Balibouse
SNB boss Thomas Jordan is receiving a lot of praise for his fight against inflation and stable prices. For example by Yvan Lengwiler from the SNB Observatory. “He did a very good job as a monetary politician,” says the economics professor from the University of Basel. Nevertheless, reforms are necessary so that the SNB functions well without Thomas Jordan – and also to make the management of the National Bank even better overall.
For example, the three well-known economists at the SNB-independent observatory, including Lengwiler himself, are calling for more people to have a say in important decisions. For example, when it comes to SNB interest rates or the Swiss franc exchange rate. The Board of Directors currently has three members, each of whom is officially appointed by the Federal Council. “The National Bank’s decisions affect every citizen quite directly. There should simply be broader support,” Lengwiler continues.
It has to be someone who doesn’t come from the SNB. Someone who has a different background of experience and can bring new ideas.
It is crucial to stimulate open debate at this important switching point. That’s why the experts are calling for the next step to be someone from outside when Thomas Jordan leaves the National Bank at the end of September. “We are of the opinion that it absolutely has to be someone who does not come from the SNB. It has to be someone who has a different background of experience and can therefore bring new ideas.” Bringing additional competencies into the SNB in this way can happen quickly and without time-consuming reforms.
Capital would be available for distribution to the federal government and cantons
The question of how much profit the National Bank should distribute to the general public from year to year is likely to take longer. The Observatory says: Even if the National Bank writes losses – as it did in the last two years – it can hand over profits from the previous period to the cantons and the federal government. “There is definitely capital that she could distribute. She just doesn’t want to spill it,” says Lengwiler.
However, the central bank experts at the Observatory also know that the SNB has reached an agreement with the federal government on the distribution of profits, which is valid until 2025. Within this existing framework, the SNB ensures that there is a thick reserve cushion. That’s why there is once again no money from the SNB for the federal government and cantons this year.
There is definitely capital that the SNB could distribute. She just doesn’t want to.
It remains to be seen whether the central bank will change its policy under new leadership. The SNB is also unlikely to simply implement the Observatory’s other reform proposals. And when asked, she did not comment on the latest report from the three independent experts.