The Swiss National Bank should increase its payments to the Swiss government and cantons. It could reach up to 6 billion Swiss francs ($6.74 billion) per year.
This content was published on January 29, 2021 – 19:38
The new profit sharing agreement between the bank and the Federal Department of Finance (FDF), announced on Friday eveningExternal linkcovers the financial years from 2020 to 2025. Under the previous agreement, the SNB could pay out a maximum of CHF 4 billion.
The SNBExternal link has faced calls from some politicians to help support the economy, which has been hit hard by the Covid-19 downturn and measures introduced to tackle the virus.
The increased payment will be made “if the financial situation of the SNB allows it”, according to a press release from the government and the bank. Full payment will be made if the SNB makes a profit of 40 billion francs.
The SNB said earlier this month that it expected to make a profit of around 21 billion francs for 2020.
After taking into account the bank’s distribution reserves, its 2020 net profit will be around 98 billion francs, so it will make the full payment of 6 billion francs for 2020, Reuters said.
“Under the National Bank Act, the SNB is required to make provisions from its annual result to maintain foreign exchange reserves at the level necessary for monetary policy. The profit remaining after allocation of funds to provisions is, in principle, available for distribution to the Confederation [government] and the cantons,” the statement explained.
In order to ensure smooth distribution flows in the medium term, the FDF and the SNB have defined the key elements in a multi-annual agreement.