Dominant by Accident
The Swiss National Bank’s Growing Influence in the Early Days of Floating Exchange Rates
The 1970s was a decisive decade in monetary history as the switch to floating exchange rates made central bankers weighty actors in economic policymaking. This paper will show that this rise in power was not pronounced by decree in the Swiss case. Politicians eyed the Swiss National Bank’s growing influence critically, some flirting with installing fiscal dominance. However, faced with widespread sympathy for central bank autonomy among the business community, political attacks on the SNB were n...
Éditeur : Graduate Institute Publications
Lieu d’édition : Geneva
Publication sur OpenEdition Books : 6 janvier 2025
ISBN numérique : 978-2-940600-58-8
DOI : 10.4000/130bc
Collection : eCahiers de l’Institut | 54
Année d’édition : 2025
The 1970s was a decisive decade in monetary history as the switch to floating exchange rates made central bankers weighty actors in economic policymaking. This paper will show that this rise in power was not pronounced by decree in the Swiss case. Politicians eyed the Swiss National Bank’s growing influence critically, some flirting with installing fiscal dominance. However, faced with widespread sympathy for central bank autonomy among the business community, political attacks on the SNB were not organised. In addition, many felt that the legal status quo of close cooperation between the Federal Council and the SNB Governing Board would keep decision-making within the reach of elected politicians. In an increasingly complex world of finance, the SNB established a position of expertise vis-à-vis the government and became the dominant force in monetary policymaking. This outcome was not driven by political choice but by structural conditions.
We extend our heartfelt thanks to the Vahabzadeh Foundation for financially supporting the publication of best works by young researchers of the Graduate Institute, giving a priority to those who have been awarded academic prizes for their master’s dissertations.
Jannik Belser studied Economics at the University of Zurich and International History at the Geneva Graduate Institute (IHEID). His department awarded him the Master's Thesis Award. After graduating in the Summer of 2024, he began to work as an economic journalist for the Swiss daily newspaper Neue Zürcher Zeitung (NZZ).
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