«In case of a major crisis, the SNB plays the role of the ultimate source of liquidity, but the banks must prepare for this in advance.» Antoine Martin, Vice-Chairman of the Swiss National Bank (SNB) since October, outlined key points on financial stability—an area under his direct responsibility as Head of Department II—in an interview published in «Le Temps» on Monday.

The SNB can only lend liquidity to banks against sufficient collateral. In order for this collateral to be accepted, the banks must have carried out the corresponding preparatory work. «This is a very important issue,» emphasizes Martin. In doing so, he is largely adopting the rhetoric of his predecessor in Departement II, the current Chairman of the Governing Board Martin Schlegel. During the spring 2023 crisis, Credit Suisse had insufficient prepared collateral.

Better Relations with Finma and the Federal Council in the Future

Unsurprisingly, and also in line with the SNB's previous position, Antoine Martin also supports the Federal Council's proposals to strengthen too-big-to-fail regulation. The Federal Council's recommendations were definitely a step in the right direction.

When asked about the relationship with the Financial Market Supervisory Authority (Finma) and the Federal Council, Martin emphasizes that it is important to maintain the best possible relationships in order to find good solutions. «In my role, I hope to maintain these good relationships or even improve them in the future.»

Swiss Franc: Neither Surprising Nor Problematic

Martin also addressed exchange rate in the interview, expressing a sense of composure. «The development of the franc this year was neither particularly surprising nor exceptionally problematic.» In its monetary policy assessment in September, the SNB stated in a unusually explicit manner that further interest rate cuts may be necessary. With this statement, no commitments were made for the future, Martin says, dampening any expectations of monetary policy.

And Martin, who only joined the SNB at the beginning of the year (as a member of the Governing Board), is also making clever tactical use of the opportunity to give the SNB's employees a pat on the back. «People who are attracted to a career at a central bank have a special profile. They are full of curiosity, believe in the mission of the institution they work for and put themselves at the service of their fellow citizens and the country.»