Monetary and currency system
The Swiss National Bank ensures the stability of the Swiss currency and the provision of the economy with liquidity – based on legal frameworks and agreements with the Federal Department of Finance.
A sufficient supply of liquidity for the economy, a stable currency and smoothly functioning financial markets are of crucial importance to every national economy. Moreover, for a small open economy with few natural resources like Switzerland, which is exposed to international competition, a stable international monetary system is especially important.
Monetary policy is the responsibility of the SNB. The Federal Department of Finance (FDF) deals with questions concerning the SNB's governance and legal basis.
The FDF and the SNB establish an agreement on the amount of the annual profit distribution by the SNB to the Confederation and the cantons. For the FDF, the FFA is responsible for this agreement.
The Federal Act on Currency and Payment Instruments (CPIA) stipulates the Swiss currency to be the franc. Legal tender – i.e. payment instruments by which monetary debts may be settled with legal effect – are, according to that law, banknotes, coins, and sight deposits at the Swiss National Bank.
Currency
Switzerland's currency policy is the responsibility of the Swiss National Bank and the Federal Department of Finance. It is designed to be flexible, so that it can react to the domestic and external stability situation.
Profit distribution NBS
The SNB distributes part of its profits to the Confederation and cantons. This distribution is set out in an agreement between the FDF and the SNB. This enables the medium-term planning of distributions and supports federal and cantonal financial planning.
Legal tender
The Federal Act on Currency and Payment Instruments (CPIA) stipulates that the Swiss franc is Switzerland's legal tender (currency). Legal tender comprises banknotes, coins and sight deposits at the Swiss National Bank (SNB). Banknotes can be used for payment without restriction, whereas payments in coins are limited to 100 coins per payment. The SNB issues banknotes, while Swissmint, a unit of the Federal Finance Administration, is responsible for minting coins.