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The Swiss National Bank

In: Swiss Banking in an International Context

Author

Listed:
  • W. Blackman

    (The University of Calgary)

Abstract

A pamphlet distributed by the Swiss National Bank begins with the following paragraph: A stable monetary system is one of the prerequisites for the prosperity of the economy. Experience has shown that the creation of money must not be left to market forces but has to be regulated by a public body. This task is performed by the central banks.1 ‘Experience’, of course, has also shown that central banks have made colossal mistakes in the past.2 They have contributed to deflation and certainly, in league with governments during times of stress such as war and post-war periods, have been largely responsible for inflation. Central banks are administered by humans and are subject to human error. Market forces, on the other hand, are impersonal, and while we might not believe that money is a ‘commodity’ like other commodities to be priced in a free market, we do, none the less, surrender the impersonal efficiencies of market forces when we decide to place the control of the money supply in the hands of central bankers. There is one exception to this.

Suggested Citation

  • W. Blackman, 1989. "The Swiss National Bank," Palgrave Macmillan Books, in: Swiss Banking in an International Context, chapter 5, pages 104-124, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-10656-1_5
    DOI: 10.1007/978-1-349-10656-1_5
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