An iceberg melts in Kulusuk, Greenland near the arctic circle. (file photo)
Keystone / John Mcconnico
The Swiss National Bank (SNB) is doing enough to mitigate climate damage with its investment policy, senior directors have stated. Switzerland’s central bank does not have the mandate to impose environmental conditions on the commercial banking sector.
The remarks follow a recent speechExternal link by the new head of the International Monetary Fund (IMF), Kristalina Georgieva, calling on central banks to do more to help mitigate climate change.
The SNBExternal link has a mandate to maintain price stability, not monitor the environmental impact of the commercial banking sector, SNB director Andréa Maechler said in a speech delivered in GenevaExternal link on Thursday. That is the role of the Swiss financial regulator, while the government sets broader economic climate rules, she said.
“The SNB must be able to deploy its balance sheet at all times, quickly and without restriction” in order to efficiently apply its mandate of ensuring price stability, said Maechler. Applying more stringent rules on investments might also violate the SNB’s neutrality in the markets.
Besides intervening in the foreign currency exchange markets, the SNB also invests an unusually high proportion of its balance sheet in company shares. At present, this holding is worth around CHF150 billion ($152 billion) invested in 6,700 company shares in more than 40 countries.
Shares and bonds
SNB director Thomas Moser said the central bank already forbids investments in shares or bonds that demonstrably damage the environment and human rights or deal in certain types of weaponry. But going further than this, by banning investments in fossil fuels for example, could “promote or disadvantage certain companies or sectors,” said Moser.
The SNB has further enhanced its green credentials by joining the “Network for Greening the Financial SystemExternal link”, a network of central banks and supervisors who share best practices on environmental and climate risk.
But Switzerland refuses to go as far as central banks in other countries, such as Sweden that recently dumped bonds from mining regions of Australia and Canada.
While the SNB acknowledges that climate change could result in financial instability, it finds that “the overall threat posed by climate risks that are capable of affecting Switzerland’s economic and financial stability appears to be moderate at present”.
Popular Stories
More
Banking & Fintech
Luxury heir claims his CHF11 billion Hermès fortune has vanished
Swiss investigate four people linked to Russian oligarch
This content was published on
The Office of the Attorney General of Switzerland is investigating four individuals linked to Russian oligarch Suleyman Kerimov.
Swiss government scrambles to deal with egg shortage
This content was published on
From September 1, more eggs intended for consumption may be imported into Switzerland. In allowing this, the government wants to secure the supply of eggs for consumers.
This content was published on
Agricultural research sees new development opportunities for Swiss sparkling wines in the face of declining wine consumption. In a survey, half of consumers expressed a willingness to pay more for local products than for foreign ones.
Locarno spotlights filmmakers from South America and Caribbean
This content was published on
The Open Doors section of the Locarno Film Festival has named the winners for 2024. The spotlight is on the South American and Caribbean regions.
Storm paralyses trains to popular Swiss tourist resort
This content was published on
The railway line between Zweilütschinen and Grindelwald in central Switzerland is expected to remain closed until Friday following heavy rains.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Negative interest rates ‘harm Swiss economy’
This content was published on
Switzerland’s largest bank, UBS, asked 2,500 companies about the impact of negative interest rates. “Nearly two-thirds of respondents said that the cost…for the economy outweighed their benefits overall,” UBS said in a press releaseExternal link on Thursday. The findings heap more pressure on the Swiss National Bank (SNB), which continues to defend its actions. However,…
SNB bows to pressure from banks for relief from negative rate
This content was published on
The SNB has offered banks some relief from negative interest rates, saying it would exempt more of their reserves from the cost of the policy.
Swiss central bank wary of Libra stablecoin impact
This content was published on
Speaking in Basel on Thursday, SNB chairman Thomas Jordan outlined the central bank’s thinking on digital currenciesExternal link. So-called stablecoins, which hold reserves of francs, dollars and other currencies in proportion to the amount of tokens issued, are much more likely to succeed as competition to traditional forms of payment, he said. This is…
Swiss National Bank must rethink emissions-heavy investments
This content was published on
Climate Alliance Switzerland has called for a “stress test” of the Swiss financial system and given recommendations for protecting it and the climate.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.