Government rejects demands to reform central bank

The government has rejected a number of proposals to reform Switzerland’s central bank. By doing so, it backed the Swiss National Bank’s (SNB) independence and its recent performance despite the failed strategy of pegging the franc to the euro. The SNB has been no stranger to political criticism in its efforts to keep the franc from appreciating too quickly against other currencies. Its policy of amassing foreign currency reserves and introducing negative interest rates has courted some controversy, not least in parliament. The abandonment of the CHF1.20 peg to the euro in January 2015 saw the franc appreciate further against the euro at the expense of exporters and the Swiss tourism industry. This sparked a raft of parliamentary proposals to force the SNB to change course. On Wednesday, cabinet rejected six such proposals, including the formation of a sovereign wealth fund, forcing a change in the SNB’s investment strategy and increasing the size of the central ...