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12 Nov 2014
Swiss Gold Initiative may threaten price stability – Swiss Central Bank
FXStreet (Mumbai) - The head of the Swiss Central bank has warned that a vote in favor of “save our Swiss gold” would make achieving price stability harder in the alpine country.
Thomas Jordan, president of the Swiss National Bank , told Swiss newspaper 20 Minuten that the adoption of the so-called “Save Our Swiss Gold” initiative would be a “fatal error of judgment”. Moreover, a vote in favor of Gold initiative would then require the Swiss National Bank (SNB) to hold a fifth of its assets in gold, a level it would need to meet within five years.
Mr Jordan said the proposal would damage the SNB’s ability to achieve price stability and keep unemployment at low levels. “Too little gold in the economic crisis was never the problem, the strong franc was the problem,” Mr. Jordan said in the interview. “We had a massive overvaluation which has led to major problems."
A recent poll showed the vote was too close to call with 44% of respondents in favor of the initiative, 39% against and 17% undecided.
Thomas Jordan, president of the Swiss National Bank , told Swiss newspaper 20 Minuten that the adoption of the so-called “Save Our Swiss Gold” initiative would be a “fatal error of judgment”. Moreover, a vote in favor of Gold initiative would then require the Swiss National Bank (SNB) to hold a fifth of its assets in gold, a level it would need to meet within five years.
Mr Jordan said the proposal would damage the SNB’s ability to achieve price stability and keep unemployment at low levels. “Too little gold in the economic crisis was never the problem, the strong franc was the problem,” Mr. Jordan said in the interview. “We had a massive overvaluation which has led to major problems."
A recent poll showed the vote was too close to call with 44% of respondents in favor of the initiative, 39% against and 17% undecided.