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The Swiss National Bank (SNB) is too opaque and needs to broaden its leadership, say three economists. They have joined forces to form what is known as the SNB Observatory.
The National Bank must communicate more openly. She owes it to the public, says Yvan Lengwiler from the University of Basel. The economics professor has joined forces with two other central bank experts to form the so-called SNB observatory.
Lengwiler explains it like this: “The National Bank is the most important economic policy institution in our country. It is simply part of a democratic state that such an institution can be held accountable. You can only do that if you understand how it works and how it works.”
More insight into SNB work required
In the case of its momentous decisions, such as negative interest rates, the National Bank only announces the result. That’s not enough, Lengwiler criticizes: “The National Bank should present its alternatives to us. What alternatives did she actually consider?”
Lengwiler wants to be able to understand SNB decisions and continues: “Why didn’t you choose the alternative approach? Were there possibly also different views within the Governing Board? Which points were controversial and why?»
Lengwiler and his colleagues Stefan Gerlach and Charles Wyplosz believe that those responsible for the SNB should give the public more insight into their work. The economists also complain that the leading National Bank Board of Directors with only three members is too small.
The more heads involved, the better
Other central banks such as the European Central Bank would have much larger decision-making bodies: “If there is a broad base of opinions in a body, then there is also a more in-depth, more difficult or more robust discussion. This obviously leads to fewer mistakes.” Although the SNB is doing its job well overall, it could always do better.
The SNB responded in writing that it was fulfilling its mandate with the existing structure: “Price stability could be guaranteed like in hardly any other country and economic development was very good in international comparison.” It does not comment in detail on the SNB Observatory’s proposals.