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Justin Low

Articles by Justin Low

SNB introduces possibility of repo rate transactions being indexed to policy rate

March 30, 2022

The Swiss central bank says it is to enhance flexibility in steering money market interest rates
This will be added to the SNB’s monetary policy repertoire moving forward but not before some test operations are conducted. For the time being, the central bank implements monetary policy by setting the SNB policy rate so this just adds to the tools they can play around with. However, I still see the key policy rate as being the main weapon in the armory.
The full announcement can be found here.

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SNB says successfully tested use of digital currency to settle transactions with top investment banks

January 15, 2022

The latest trial could see the introduction of central bank digital currency move a step closer in Switzerland. The SNB says that they integrated the digital currencies into payment systems and used them in simulated transactions involving UBS, Credit Suisse, Goldman Sachs, and Citigroup.
The test showed it was possible to instantaneously execute payments, ranging from CHF 100,000 to CHF 5 million, elimination counter-party risk.
I still think it will be a while before this becomes a whole thing but if anything, it looks like any rollout could take place rather quickly given how central banks are continuing to do their due diligence in the meantime.

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