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2015/12/01 00:00:00 GMT+1

Statement from the Swiss Bankers Association (SBA) regarding the Swiss Sovereign Money Initiative

The Swiss Bankers Association (SBA) firmly rejects the Swiss Sovereign Money Initiative, which was submitted today by its initiators. The initiative would increase the cost of mortgages and lending. Further to this, it would carelessly and irresponsibly put at risk jobs, tax revenues, the efficient and secure economic system, and Switzerland’s prosperity.

The Swiss Sovereign Money Initiative would have consequences for the real economy and SMEs, as it:

  • would bureaucratise and restrict the supply of money to the economy. Borrowing would become more expensive for all companies. SMEs that are too small for the capital market and are reliant on bank lending would in particular suffer as a result.
  • would hinder sound investments, which would result in the loss of jobs.
  • would result in many years of uncertainty in terms of the Swiss financial market. The Swiss financial centre, which is of international significance, would be put at acute risk.

The Swiss Sovereign Money Initiative would also affect Swiss citizens, as it:

  • would punish depositors, and they would earn even lower interests on their savings.
  • would shrink the economy and the resulting tax deficits would have to be compensated by us all. The promise of increased profit from money creation (seigniorage) to the benefit of the general public is a fairy tale.
  • would render mortgages more expensive. The dream of owning one’s own home would thus become viable for a reduced number of Swiss citizens.

The problems that the initiative purports to resolve have generally already been resolved:

  • Switzerland has one of the strictest too-big-to-fail regimes in the world. It does not require full-value legal tender in order to ensure the security of the Swiss financial centre.
  • Deposits belonging to savers are protected by the deposit protection scheme.
  • Money creation does not enable the banks to generate risk-free profit at the expense of third parties. On the contrary: As lenders, the banks carry a significant amount of risk. That is their economic role, one which they execute very successfully in Switzerland.