SNB Could Lose Independence After Swiss Shock

Six weeks after a fateful decision that blasted its currency skywards, Switzerland’s central bank is coming under intense scrutiny, with critics calling for changes to its insular policy practices and century-old ownership structure.

The shock of the Jan. 15 move by the Swiss National Bank (SNB) to abandon the franc’s three-year-old cap against the euro is still reverberating, with politicians stepping up their criticism as the economy falters.

With an election looming this year, the pressure is likely to grow. The Social Democratic Party (SP) is pushing for a parliamentary debate on the workings of the SNB and its tiny three-governor board, a structure it says has led to opaque decision-making. Lawmakers from the party came away dissatisfied from a rare meeting with one of the governors last week.

“It can’t be that three people have more influence over a country’s destiny than the government,” Susanne Leutenegger Oberholzer, a Social Democrat lawmaker, told Reuters.

The move by the SP, which holds two seats on the seven-member council that governs Switzerland, is part of a wider backlash since the SNB move that sent the franc soaring against the euro, threatening an economy that relies heavily on exports to Europe.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza