Swiss National Bank

(Banque Nationale Suisse), Switzerland’s central bank and sole bank of issue. Established in Zurich in 1905, the bank is a joint-stock company, with 58 percent of its shares held by the cantons, cantonal banks, and other state institutions and 42 percent by private shareholders.

The Swiss National Bank issues bank notes, regulates the supply of money and credit, and organizes the operations of payment. In the 1970’s, when the currency crisis became acute and foreign capital poured into Switzerland, the Federal Council adopted decrees to protect the currency (October 1971 and June 1974) and to regulate domestic credit (December 1972).

In accordance with the two decrees on currency, the Swiss National Bank canceled the payment of interest on foreign deposits in Swiss banks and introduced a system by which interest may be charged, rather than paid, on such deposits; among other measures, the bank imposed restrictions on the sale of Swiss francs for future delivery. The decree on domestic credit authorized the imposition of mandatory minimum bank reserves in the Swiss National Bank. As of 1954 bank notes were no longer redeemable for gold, although a 40 percent gold cover of bank notes in circulation was maintained; in June 1977 the actual gold cover was 62 percent.

As of June 1977 the Swiss National Bank had total assets of 35 billion Swiss francs, with 19.1 billion francs’ worth of bank notes in circulation. Banks and companies had accounts in the bank totaling 10.8 billion francs, and capital and reserves totaled 70 million francs. The bank held 27.4 billion francs in gold and foreign currency and 4.6 billion francs in foreign treasury notes.