Swiss Feel Tariff Fallout More Than Others, SNB Chief Says
(Bloomberg) — Switzerland is more exposed to the trade conflict with the US than other countries, according to its central bank chief.
While the current situation creates high uncertainty for all countries involved, Switzerland as a small and open economy “feels the effects of protectionism particularly hard,” Swiss National Bank President Martin Schlegel said Friday in Bern. The environment also “presents a challenge” for monetary policy, he added.
Addressing the central bank’s annual shareholder meeting, he said that both the growth outlook and the long-term effects of the tariff tensions — including the rising fragmentation of the world economy — are unclear. The Swiss government withdrew its forecasts for this year after US President Donald Trump announced sweeping tariffs.
To manage the situation, the SNB has cut its key interest rate to 0.25% and a growing number of economists expect it lower the benchmark to zero at the next policy decision in June. Among officials’ chief worries is the strong appreciation of the franc, which could push Swiss inflation below zero.
Schlegel reiterated the SNB’s stance that the central bank is willing to intervene if needed to keep its currency from appreciating, highlighting that “it is always about adjusting monetary conditions” and “not about achieving a specific exchange rate target.”
The institution is one of few central banks in the world of which investors can buy stock and its annual general meeting in the Swiss capital on Friday allowed shareholders to voice their concerns — though they have no say on monetary policy.
As last year, climate activists were protesting at the gathering. Campaigners holding shares used their right to speak, calling on the central bank to use its sizable equity portfolio to push for improvements at companies it owns a stake in or to stop investing in pollution-heavy companies altogether.
“Is the SNB really acting in the overall interests of the country when it invests billions in companies that accelerate global warming?,” asked Anne-Käthi Zweidler of the Climate Seniors Switzerland group.
In front of the conference venue, about 20 people were gathered at 9:30 a.m. local time, holding up placards of Schlegel’s face and the slogan “burn, baby, burn“ to protest the SNB‘s alleged inaction on climate change.
Replying to the criticism, Schlegel told shareholders that the SNB aims to reduce the emissions from its operations to net zero but doesn’t set climate targets for its portfolio.
“The reason is that our legally defined narrow mandate is focused on price stability,” he said, echoing earlier remarks. “The SNB may not pursue targets aside from its mandate — even if those are societally important targets, as is the case with climate change.”
Bitcoin Suisse Chairman Luzius Meisser called on the central bank to include the crypto asset in its reserves, calling it a “monetary asset for the digital age.”
In line with his regular stance, Schlegel turned down the request, saying that “at present, Bitcoin doesn’t fulfill our requirements” due to its volatility.
After the SNB reported a first-quarter profit based solely on gold gains on Thursday, shareholder grievances also included the comparatively low dividend. Out of last year’s distributable profit of almost 16 billion francs, the central bank paid only 1.5 million francs to shareholders. Officials refused to vote on a proposed increase, saying that the maximum dividend is stipulated by law.
Echoing past remarks from Schlegel, supervisory council chief Barbara Janom Steiner said on payouts that no dividend is guaranteed for this year as sufficient capital holdings must have priority over profit distributions.
“Negative equity capital should be avoided by all means,” she said. “The SNB must further strengthen its equity capital to be capable of cushioning the high risks to its balance sheet.”
(Updates with details from seventh paragraph.)
©2025 Bloomberg L.P.
