makes your trading easier
Popular links:
Currency codes
Forex glossary of terms
Forex FAQ's
Currency forwards
Currency futures
Currency options
Currency swaps

Home  >  Fundamental analysis  >  Central banks  >  Swiss National Bank

Swiss National Bank

The Swiss National Bank is the Switzerland's central bank.

Founded by the Federal Act on the Swiss National Bank (16 January 1906), it began conducting business on 20 June 1907. Its shares are publicly traded, and are held by the cantons, cantonal banks, and individual investors; the federal government does not hold any shares. Although a central bank often has regulatory authority over the country's banking system, the CNB does not; regulation is solely the role of the Federal Banking Commission.

Switzerland's central bank is independent of the government, which means it is free to set interest rates. Its policy goal is price stability, which it says is an important precondition for economic growth and prosperity. It bases its monetary policy on a medium-term inflation forecast. Its chosen reference interest is the three-month Libor rate (London Interbank Offered Rate). The SNB issues bank notes and distributes coins on behalf of the government. Its profit is broadly speaking divided up among the cantons (two-thirds) and the federal government.

About Swiss banks

Swiss banks are world-renowned for their stability, privacy and protection of clients. All banks in Switzerland are regulated by Swiss banking law (Banking Law of 1934, amended 1999) which strictly limits any information shared with third parties, including foreign governments. In general, there is no simple way to trace the source of money placed on deposit with a Swiss bank, as they do not disclose client information.

Although Switzerland has a historic reputation for bank secrecy and numbered bank accounts, in practice all private bank accounts are not anonymous as they are linked to an identified individual under Swiss banking law. However, this law also allows Swiss banks to refuse to give any information to investigating authorities unless there are exceptional circumstances, such as evidence of the client being involved in drug trafficking.

Switzerland is an important part of the international financial system, holding an estimated 35 percent of the world's private and institutional funds, or 3 trillion Swiss francs (CHF). Switzerland is regarded as a safe haven economically and politically, with war successfully kept outside its borders for more than 200 years, including World War I and World War II. The Swiss franc is also considered to be one of the worlds premier currencies, with virtually zero inflation and historically backed by at least 40% gold reserves.

There are about 400 banks in Switzerland, ranging from the "Two Big Banks" down to small banks serving the needs of a single community or a few special clients. The Two Big Banks, namely UBS and Credit Suisse, account for over 50% of all deposits in Switzerland, and have extensive branch networks throughout the country and most international centres. All banks are regulated by the Swiss Federal Council through its Banking Commission. A number of these banks also have offices or other representation in foreign countries.

The Swiss banks have a long reputation for managing investment portfolios for their clients, and providing other services such as estate planning, wealth management, trust companies and tax planning for individual customers.

The Swiss franc is the currency of Switzerland. This is one of the world's most stable currencies, thanks to the neutrality, fiercely conservative monetary policy and ample gold reserves of the Swiss national bank.

Swiss francs are shortened either with the official banking name CHF (from the latin name of the country Confederation Helvetica, CH) or sometimes just Fr. or Sfr.

Site map | Contact us

© 2006—2018 Forextheory