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At the Swiss National Bank’s Money Market Event in Geneva on Oct. 29, Petra Tschudin and Thomas Moser explained how the bank provides central-bank liquidity only against sufficient collateral. They said the SNB GC Basket helps make collateral mobilisation and interbank repo activity more effective, while the bank reviews its policy as markets and technology change.
Swiss National Bank officials Petra Tschudin and Thomas Moser set out the central bank’s collateral policy at its Money Market Event in Geneva on Oct. 29, explaining how the SNB supplies liquidity to financial institutions only against collateral it considers sufficient. The policy is intended to limit credit risk to the central bank while supporting monetary policy operations and the smooth processing of payments.
The SNB’s account of the event says its collateral policy applies to credit and repo transactions. When the central bank lends or supplies liquidity, it faces the risk that a counterparty will not meet its obligations. The SNB says collateral gives it an asset it can sell if a counterparty defaults, limiting potential losses and protecting its balance sheet.
The speakers described the SNB GC Basket as an important part of the framework. The basket combines high quality requirements with a broad international scope, according to the SNB, and has become an established collateral standard in the Swiss interbank repo market. A shared standard and integrated market infrastructure can make it easier for participants to mobilise eligible collateral.
The presentation linked collateral rules to three statutory functions: implementing monetary policy through the Swiss franc money market, supporting cashless payments, and contributing to financial stability. The event focused on the first two. The SNB uses repo transactions to provide or absorb liquidity to help keep short-term market rates close to its policy rate; it may also supply liquidity when banks need it to process payments. The source describes these purposes but does not announce a new facility or a specific change to collateral eligibility.
Collateral Rules Shape Swiss Liquidity
Collateral policy affects more than the SNB’s exposure to borrowers. It also influences which assets financial institutions can use to obtain central-bank liquidity and how readily liquidity can move through the money market. If collateral is eligible, legally prepared and operationally accessible, banks may be better positioned to obtain funds when needed.
The SNB argues that a common basket and market infrastructure support efficient collateral mobilisation. That matters for monetary policy because repo operations are one means of adjusting liquidity conditions, and for payments because banks need central-bank money to settle transactions. The policy’s safeguards also bear on the central bank’s ability to manage credit risk while carrying out its statutory tasks. These are the SNB’s stated rationale and should not be read as evidence that any particular operational outcome is guaranteed.
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How the SNB Uses Liquidity
The National Bank Act assigns the SNB responsibilities that it carries out in part by making liquidity available to the financial system. In the Swiss franc money market, institutions lend to one another over short periods, with related cash flows settled through sight deposits at the SNB. The SNB says it uses repo transactions to influence liquidity and keep short-term market rates close to its policy rate.
The speech distinguished different operating conditions. It said that during the negative-interest-rate environment, the SNB sometimes supplied liquidity even when liquidity in the system was already high, aiming to counter temporary upward pressure on short-term rates. In the environment described in the report—where the policy rate was non-negative and liquidity remained high—open market operations were being used to absorb liquidity. The speech also cited payment needs and liquidity support during the Credit Suisse crisis as other reasons the SNB may provide liquidity.
The officials described collateral policy as a framework that should be effective, efficient and transparent. In the SNB’s account, effectiveness depends partly on whether participants can actually deliver assets and establish a valid security interest; efficiency depends on whether collateral can be mobilised quickly and reliably without excessive operational effort. The central bank said it reviews the policy on an ongoing basis for changing market conditions and technological developments.
“The SNB provides the financial system with central bank liquidity.”
— Petra Tschudin and Thomas Moser, in the SNB speech
No Eligibility Changes Announced
The source report records an explanation of the SNB’s approach, but does not identify a new collateral rule, an implementation date, or specific changes to the GC Basket. It also does not quantify how much the basket has affected market liquidity or payment efficiency. The speech’s description of current operations is tied to the conditions presented at the event; the material does not provide updated figures or a forecast.
Further operational detail is also limited in the supplied material. It does not specify which assets may be added or removed, how eligibility decisions will be made in individual cases, or what technological developments could prompt policy adjustments. Those points remain open unless the SNB publishes additional information.
SNB Review Continues
The SNB said it will continue to review its collateral policy and make adjustments if market conditions or technology warrant them. The event report does not give a timetable for a review outcome or signal that a particular amendment is planned.
Market participants will need to look to future SNB publications for any concrete changes to eligible collateral, operating procedures or the GC Basket. Until the central bank announces such measures, the development is best understood as an explanation of the existing framework and its stated purposes, not a change in policy.
Key Questions
What did the SNB announce on Oct. 29, 2026?
Petra Tschudin and Thomas Moser presented the SNB’s collateral policy at a Money Market Event in Geneva. The source describes an explanation of the framework, not a new collateral measure.
Why does the SNB require collateral?
The SNB says collateral limits its credit risk when it supplies liquidity. If a counterparty cannot meet its obligations, the central bank can sell the collateral to help avoid a loss.
What is the SNB GC Basket?
It is a basket of collateral that the SNB describes as combining high quality requirements with broad international scope. The SNB says it has become an established standard in the Swiss interbank repo market.
Does the report describe a change to collateral eligibility?
No specific eligibility change or implementation date appears in the source material. The SNB says it reviews its policy on an ongoing basis, but did not identify a planned amendment in this report.
Source: snb.ch
