In a strategic move to fortify its monetary policy, the Swiss National Bank (SNB) announced a significant adjustment, raising the minimum reserve requirement for domestic banks. Effective July 1, amendments to the National Bank Ordinance will be enacted to accommodate this change, the SNB confirmed on Monday.
“This strategic adjustment aims to uphold the effectiveness and efficiency of the SNB’s monetary policy,” stated the Swiss central bank in an official release.
Under the revised regulations, liabilities stemming from cancellable customer deposits, excluding tied pension provisions, will now be fully incorporated into the calculation of the minimum reserve requirement, aligning them with other relevant liabilities, the SNB outlined.
This marks a departure from the previous practice, where only 20% of such liabilities contributed to the calculation, the bank clarified. Additionally, the SNB is elevating the minimum reserve ratio from 2.5% to 4%.
As sight deposits held by banks to fulfill minimum reserve requirements do not accrue interest, the SNB anticipates reduced interest costs as a result of these adjustments, without impacting its existing monetary policy stance.
