News conference
Berne, 25 March 2020
Thomas Jordan
Introductory remarks by Thomas Jordan
Ladies and Gentlemen
First, on behalf of the entire Swiss National Bank, I would like to express our sympathy to all
those directly affected by coronavirus.
Swiss society and our country's economy face enormous challenges. The SNB is working
closely with the Federal Council, the authorities and the business community to overcome this
crisis. The measures adopted by the SNB complement those of the Confederation and are
intended to cushion the economic impact of the coronavirus pandemic. Monetary policy
supplements the various fiscal measures taken by the public authorities.
The Swiss National Bank has set up the SNB COVID-19 refinancing facility (CRF). This
instrument is designed to strengthen the supply of credit to the Swiss economy by providing
the banking system with additional liquidity. There is no upper limit on the amounts available
under the CRF, and drawdowns can be made at any time. The CRF will be available from
26 March 2020.
The CRF operates in conjunction with the federal government's guarantees for corporate
loans. The facility allows banks to obtain liquidity from the SNB, which is secured by these
federally guaranteed loans. In taking this action, we are enabling banks to access the required
liquidity that will allow them to expand their lending rapidly and on a large scale. The interest
rate for these refinancing transactions corresponds to the SNB policy rate, currently -0.75%.
Under the CRF, the SNB can also conduct additional refinancing transactions in order to
supply the banking system with further liquidity if required.
As I mentioned, the SNB's new refinancing facility operates in conjunction with the federal
government's guarantees for corporate loans. So how does this approach work?
News conference
In a stressed situation like the one we are facing, the risk of companies defaulting on loans
increases. At the same time, the banks are seeking to hold higher levels of liquidity. These
two factors can lead to a credit shortage, even though demand for credit is rising sharply. The
Confederation's loan guarantees and the SNB's refinancing facility can unblock the system
and get credit flowing again. As the banks have all the necessary client relationships, the loans
will find their way to the companies that need them. The approach is simple, effective and
makes use of existing structures.
Bank lending will play a crucial role in Switzerland's economic development, especially in
the coming weeks and months. The new CRF is intended to support banks in these efforts, as
is the raising of the exemption threshold for the negative interest rate announced by the SNB
last week.
Furthermore, after consulting with FINMA, the SNB has submitted a proposal to the Federal
Council requesting that the countercyclical capital buffer for mortgage loans on residential
real estate be deactivated. This integrated package of measures gives banks maximum latitude
for lending.
Since imbalances persist on the Swiss mortgage and real estate markets, it is important that
banks take adequate account of risks when granting mortgages. We are confident that the
banks are aware of these risks. We are also confident that they will not use the latitude
afforded by this access to capital to pay dividends or buy back shares, but rather to fulfil their
economic function.
In addition to facilitating lending, the SNB is helping to stabilise the economic situation
through its expansionary monetary policy. To ensure appropriate monetary conditions, we
must counteract increased upward pressure on the Swiss franc. We have therefore decided to
scale up our foreign exchange market inventions - a tried-and-tested instrument - to shield
the Swiss economy.
Ladies and gentlemen, within the scope of its mandate, the SNB is doing everything it can, in
cooperation with the Federal Council and the authorities, to mitigate the economic impact of
the coronavirus crisis on the population and on companies.