The Swiss National Bank’s assets

Asset structure
Function of assets
The Swiss National Bank’s assets essentially consist of foreign currency, gold and financial assets in Swiss francs (securities and claims from repo transactions). They fulfil important monetary policy functions. Their composition is determined mainly by the established monetary order and the requirements of monetary policy. Part of the assets, including claims from repo transactions, serve immediate monetary policy purposes. The SNB uses repo transactions to supply commercial banks with liquidity in the form of base money by purchasing securities from them. By setting the terms for such transactions, the SNB is able to influence the level of interest rates in the money market. The National Bank holds currency reserves – in the form of foreign currency and gold – in order to have sufficient monetary policy leeway at all times. Currency reserves serve to prevent and overcome potential crises.
Breakdown of assets
At CHF 207 billion, total assets remained relatively stable year-on-year (CHF 214 billion). However, the composition has changed. While balances from swap transactions against Swiss francs and claims from repo transactions declined substantially, the level of currency reserves rose. At the end of 2009, currency reserves amounted to CHF 140 billion or CHF 61 billion higher than a year previously. This rise in the reserves was due, in particular, to the foreign exchange purchases in 2009 (some CHF 45 billion) aimed at curbing the appreciation in the Swiss franc; about CHF 7 billion were attributable to the rise in the price of gold and CHF 5 billion to the additional allocation of special drawing rights (SDR) by the International Monetary Fund (IMF). At the end of the year, balances from EUR/CHF swap transactions amounted to almost CHF 3 billion. In addition, at the end of 2009, the SNB held Swiss franc assets in the form of claims from repo transactions amounting to CHF 36 billion and claims from bonds for almost CHF 7 billion. At end-2009, the loan to the stabilisation fund came to CHF 21 billion. It is denominated in different currencies, with interest being paid at the one-month Libor for the currency in question plus 250 basis points.


Debtor categories and instruments
The large majority of investments are fixed-income securities. They comprise claims from repo transactions in Swiss francs, claims from EUR/CHF foreign exchange swaps, Swiss franc-denominated securities, claims from gold lending operations and most of the foreign exchange reserves. The remaining foreign exchange reserves consist of equities. Monetary policy transactions are carried out with domestic and foreign banks. Lending is secured by first-class collateral. The bond portfolios for foreign exchange reserves and Swiss franc bonds comprise government and quasi-government bonds as well as bonds issued by international organisations, local authorities, financial institutions (essentially, covered bonds and comparable instruments) and other companies. In the case of foreign exchange reserves, secured and unsecured money market investments are, to a limited extent, also made at banks. Exchange rate and interest rate risks are managed by means of derivative instruments, such as interest rate swaps, interest rate futures, forward foreign exchange transactions and foreign exchange options. In addition, futures on equity indices are also used to manage the equity investments. A small portion of gold holdings was used in the form of secured gold lending transactions at year-end.