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Thomas Jordan, the long-standing chair of the Swiss National Bank, announced his resignation on Friday, bringing to an end a turbulent tenure of unorthodox policymaking.
Jordan, the longest-serving of any major central bank governor, will step down in September, the SNB said. His term had been due to finish in 2027.
“Thomas Jordan has been a defining influence on the SNB and its monetary policy for over a quarter of a century,” said Barbara Janom Steiner, president of the bank’s supervisory council. “I deeply regret his decision.”
The 61-year-old economist joined the SNB from a career as an academic in 1997 and held several senior roles at the central bank before being made chair in 2012.
Just three years into his tenure, the SNB triggered a major economic crisis in Switzerland. On January 15 2015, the bank announced it was abandoning its policy of keeping the franc pegged to the euro, triggering a 30 per cent surge in the Swiss currency’s value.
The rest of Jordan’s tenure was spent battling to keep the value of the franc down — a huge challenge because of Switzerland’s role as a financial haven in an era of successive international political and financial crises, and loose monetary policy in the US and eurozone.
To do so, Jordan presided over an unprecedented period of unorthodox monetary policy. The SNB put its baseline interest rate into negative territory in 2015, and kept it there for nearly eight years.
One side effect of the policy was a sustained period of underperformance for Switzerland’s large banking sector, whose margins across its traditional core businesses — catering to Swiss savers and taking deposits from the world’s wealthy — were squeezed, arguably pushing some banks and their clients into riskier but higher margin fields of financial speculation.
The SNB’s attempts to control the franc also resulted in a huge expansion of the central bank’s balance sheet.
Jordan and his team repeatedly intervened in foreign currency markets, buying up equities, bonds and gold outside of Switzerland in an attempt to offset the upward pressure on the franc.
Those purchases coincided with surging asset values. In 2017, the SNB made SFr54bn ($61bn) in profits from its foreign investment portfolio. By 2021, its balance sheet had swelled to more than SFr1tn in size, making it bigger than the investment funds of many petrostates.
The bank found itself in the uncomfortable position of being one of the largest shareholders in many of the world’s biggest companies, including Apple, Microsoft and Facebook.
Its foreign currency interventions also drew the ire of the US Treasury, which threatened on multiple occasions to have Switzerland officially labelled as a currency manipulator, incurring potential trade sanctions as a result.
As the world exited the coronavirus pandemic and loose monetary policy turned amid rising inflation in 2022, however, the SNB’s huge long positions in global equities harmed it. That year the bank recorded a SFr132bn loss on its portfolio.
Rising rates also brought with them another domestic crisis. Last year the SNB was forced to play a key role in saving Credit Suisse, Switzerland’s second-largest bank, and orchestrating its emergency takeover by rival UBS.
While the rescue stopped what Jordan said at the time would have been a catastrophic financial crisis in Switzerland — with potential global repercussions — critics say it has stored up problems for the future. The combined UBS-Credit Suisse entity manages assets of more than $5.5tn.
The SNB said it would announce a successor to Jordan in due course.
“Having met the various challenges of recent years, now is the right time for me to step down,” Jordan said. “My thanks also go to the federal council, parliament and the public for their great trust in the SNB and for safeguarding its mandate and its independence.”
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