The argument by the trade unions is that the SNB has a huge amount of money that it could give to the state-pension fund.

This is only paper money, accounting gains. You can’t distribute them, as long as they have not been realized. The assets that the SNB purchased with the euros it bought to weaken the franc are currently very positively valued relative to the purchase price because the equity market has been going up and the interest on bonds has gone down.

If the SNB now sold these assets it would get euros and dollar, which it couldn’t distribute in Switzerland. It would have to buy back Swiss francs instead. And that would be in contradiction of its policy and the franc would go through the roof.

The gains are essentially a function of Switzerland’s stability. Shouldn’t the population profit from these gains?

There is a good chance that maybe in 10 to 15 years this episode of monetary policy will lead to significant gains for the SNB.

«Helicopter money has a fancy name that people get excited about»

At that point, these gains will be distributed. The SNB distributes as much as it can. Why is it that we want it all for us right now? Are we particularly underprivileged?

Do you think that the so-called helicopter-money could help achieve faster growth?

What a crazy hype! People are discussing helicopter-money as if we needed it, which is totally absurd. This would be a measure for a really severe crisis, where you had to decide on a decisive macro-economic measure. But handing out money to people is a fiscal move, not one to be taken by monetary authorities.

Helicopter money has a fancy name that people get excited about and it is very dangerous to think that the central bank could do this. It is a political move. In addition, it is borrowing at the expense of future generation. Are we sure that we are so bad off today that we should take all the money for us and not leave it for future generations? Given climate change, maybe our children will need the money much more urgently than we.

Is there a better option available for governments to kindle growth?

In Switzerland, the government has reduced its debt for years, and so it has a wealth of possibilities to provide money to the people. It may not be the best option, but one example would be a tax cut. This is a good way to re-stimulate activity if it was really needed.

Jean-Pierre Danthine, 69, is a Swiss-Belgian economist and former vice-chairman of the Swiss National Bank (2012 – 2015). He studied economics at Catholic University of Leuven and earned his PhD at Carnegie Mellon University. Danthine has authored several books and numerous articles.
Currently, Danthine is adjunct professor at EPFL in Lausanne. From 2005 through 2009, Jean-Pierre Danthine was managing director of the Swiss Finance Institute. He is married and has two children.