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The Swiss National Bank has defended its governing board after an April 2022 NGO report criticised it for lacking differing points of view.
SNB spokesperson Claudia Aebersold Szalay, told Central Banking on June 3 that “the organisational set-up has proved its worth” by “fostering intensive and efficient discussions and allowing for quick decision-making”. The SNB’s response echoed comments it made after the SNB Observatory, an independent think-tank, first released its report.
The think-tank wrote in its April report that “small committees are susceptible to group think”. It said “the SNB would benefit from having external members”.
The report’s authors – Stefan Gerlach, Yvan Lengwiler and Charles Wyplosz – proposed limiting the number of terms board members could serve. They also said the central bank was insufficiently transparent about monetary policy-making, giving too few press conferences and failing to publish minutes.
The SNB has a three-member governing council, including a chairman, who is effectively the central bank’s governor, and a vice-chair. The federal council, Switzerland’s government, names the board’s members to six-year terms, and each leads a department.
There are also six alternate members of the SNB council, who act as deputy department directors. The federal council increased the number of alternate members in May, from three. However, there are currently only four alternate members in office, two of whom were named in May.
SNB’s Aebersold Szalay said the board is not insular, but rather consults widely within and outside the central bank in the making of monetary policy. “Expertise is gathered from across the entire bank,” she said, adding that the SNB communicates with external actors through research seminars and conferences, the media and public appearances before parliament and other venues. The central bank also opposes publishing board minutes, Aebersold Szalay noted, because policy-makers fear official minutes would discourage frank discussion. “Decisions would potentially no longer be taken in the official discussions, but rather outside of the minuted meetings,” she said.
Federal council considered the question of the board’s composition, said Aebersold Szalay, concluding in a December 2016 report that the board’s size should remain unchanged. The federal council itself has seven members.
The Observatory contested some of these arguments in its April report, which argued that “all central banks involve their staff in the policy process”, but “the general view is that only members with voting rights are to be seen as policy makers”.
Central bank boards and monetary policy committees vary widely in size. Among the 33 central banks represented in Central Banking’s Governance Benchmarks 2022, the average board size was between 7 and 8.
The SNB is not alone in having a three-member board. Uruguay’s central bank, for example, has a similar three-member structure, consisting of the governor, deputy governor and a third member.
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