TL;DR
In a speech published on October 29, 2026, Swiss National Bank Governing Board members Petra Tschudin and Thomas Moser described how the SNB provides central-bank liquidity against eligible collateral. They said the SNB GC Basket supports monetary policy and payments, while collateral requirements limit credit risk and protect the bank’s balance sheet.
Swiss National Bank Governing Board members Petra Tschudin and Thomas Moser used a speech at the bank’s Money Market Event in Geneva on October 29 to explain how the SNB supplies central-bank liquidity against collateral. They said the policy helps protect the SNB’s balance sheet while supporting monetary policy, cashless payments and financial stability.
The speech says the SNB provides liquidity to the financial system to carry out tasks assigned by the National Bank Act. It identifies three purposes: implementing monetary policy through the Swiss franc money market, supporting the processing of cashless payments, and contributing to financial stability through liquidity support when needed. The event’s focus, according to the speakers, was the first two purposes: money-market operations and payments.
For monetary policy, the SNB uses repo transactions to supply or absorb liquidity, with the aim of keeping short-term money-market rates close to the SNB policy rate. Tschudin and Moser said that when the policy rate is non-negative and liquidity in the system remains high, the SNB’s open-market operations are used to absorb liquidity. They contrasted this with periods when the bank supplied liquidity to counter temporary upward pressure on short-term rates.
The speakers said banks can also need short-notice liquidity during the day because payments arrive and leave at different times. The SNB provides liquidity for this purpose when necessary. Separately, the bank may provide liquidity support if a bank’s own buffers are no longer sufficient; the speech cited support during the Credit Suisse crisis as an example. The SNB’s collateral policy sets the conditions for collateralising its credit and repo transactions.
Collateral Links Policy to Payments
Collateral rules affect more than the SNB’s exposure to individual counterparties. They also shape which assets banks can use to obtain central-bank liquidity and how readily that liquidity can be moved through the financial system. Tschudin and Moser said the policy influences liquidity redistribution between banks in the money market, connecting a technical framework to the day-to-day capacity of institutions to settle transactions.
The speakers described the SNB GC Basket as a shared collateral standard in the Swiss interbank repo market. They said its combination of high quality requirements and broad international scope, together with integrated market infrastructure, helps market participants mobilise collateral. In the SNB’s account, that can support monetary-policy implementation and the smooth operation of payments. The speech describes the intended role of the framework; it does not provide new quantitative evidence on its effects.
For the SNB, the collateral requirement is also a safeguard. If a counterparty cannot meet its obligations, the bank can sell the pledged assets to limit potential losses, according to the speech. The speakers said this protects the SNB’s balance sheet and helps preserve its financial independence, which they linked to its ability to carry out its statutory mandate over time.
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How SNB Liquidity Is Used
The National Bank Act assigns the SNB several tasks, and the speech links three of them to liquidity provision. In the Swiss franc money market, institutions lend to one another over short periods, with cash flows settled through sight deposits at the SNB. The bank uses repo operations to manage liquidity conditions and influence short-term rates relative to its policy rate.
Liquidity also supports payments between banks and their customers. Since incoming and outgoing payments do not occur at the same moment, banks may face temporary needs even if their overall funding position is sound. The SNB can supply liquidity to help payments proceed. The third purpose is support for financial stability when an institution considers its own liquidity buffers inadequate; the speech refers to the Credit Suisse crisis in this connection.
The SNB says collateral must meet requirements set out in its policy and be operationally and legally usable. The speakers described a sound framework as effective, efficient and transparent: eligible assets must be deliverable, the SNB must be able to establish a valid security interest, and collateral must be mobilised reliably and without unreasonable operational effort. The policy is reviewed on an ongoing basis, the speech says, to account for changes in markets and technology.
„The SNB provides the financial system with central bank liquidity. It always does so against collateral, and this has to meet requirements set out by the SNB in its collateral policy.“
— Petra Tschudin and Thomas Moser, SNB Governing Board members
Policy Changes Remain Unspecified
The speech says the SNB reviews its collateral policy continually and may adjust it to reflect market conditions and technological developments. However, the published material provided here does not announce a specific change, give a timetable for a revision, or identify new eligibility rules for collateral. It is therefore not clear whether any near-term policy amendments are planned.
The speech also does not provide figures for the current volume of liquidity absorbed through open-market operations or for liquidity available to support payments. While it refers to charted operations and describes the SNB GC Basket’s role, the material does not quantify the effects of the framework on market liquidity or payment performance. Those points should not be inferred from the general description.
Ongoing Review, No Date Set
The SNB says it will continue reviewing its collateral policy and make adjustments as needed as market conditions and technology evolve. The speech does not set a date for a further review or signal a specific upcoming change. Any future modification to eligibility, operational arrangements or the GC Basket would need to be established through subsequent SNB communications.
For now, the development is an explanation of the existing framework and its stated purposes, rather than an announcement of a new liquidity facility or collateral measure. Market participants can look to the SNB’s later publications for details if the bank makes changes or provides additional information about implementation.
Key Questions
What did the SNB announce on October 29, 2026?
No new collateral measure was announced in the material provided. Petra Tschudin and Thomas Moser gave a speech explaining the SNB’s collateral policy and how it relates to liquidity provision.
Why does the SNB require collateral for liquidity?
The SNB says collateral helps limit its credit risk. If a counterparty cannot meet its obligations, the bank may sell pledged assets to reduce potential losses and protect its balance sheet.
What is the SNB GC Basket?
The speech describes it as a collateral basket with high quality requirements and a broad international focus. Tschudin and Moser said it has become a collateral standard in the Swiss interbank repo market and helps participants mobilise collateral.
Does the speech say the SNB will change its collateral rules?
No specific change or timetable is given. The speakers said the SNB reviews the policy on an ongoing basis and adjusts it as needed in response to market conditions and technological developments.
Source: snb.ch
