SNB President to Step Down
Posted by Colin Lambert. Last updated: March 4, 2024
The foreign exchange market has a chance to say goodbye to one of the indirect architects of the mayhem of 15 January 2015, when Swiss National Bank chairman Thomas Jordan steps down from the central bank.
The SNB has issued a release stating that Jordan, who joined the central bank in 1997, has notified it of his intention to step down at the end of September 2024 and expressing its “great regret” at his decision and “sincere thanks for his many years of outstanding commitment”.
The release acknowledges that Jordan’s period at the helm of the SNB coincided with a period of an “unusually large number of challenges”, not least the de-pegging of the Swiss franc from the euro on 15 January 2015, although it restricts itself to noting, “with the discontinuation of the minimum exchange rate of the Swiss franc against the euro, the SNB was able to maintain control over and safeguard the effectiveness of its monetary policy.”
On that day in 2015, the SNB abandoned the peg, just days after one of Jordan’s lieutenants had specifically stated the central bank was committed to it, causing mayhem in the FX market as EUR/CHF almost went to zero in what is seen by many as the poster child for flash crashes in FX. It quickly recovered, to end the day some 25% lower than it started, but left behind a legal mess that is still to this day being cleared up, with retail traders (and one firm) ending the day effectively bankrupt and prime brokers looking seriously at their business models.
On a more positive note, under Jordan’s watch, the SNB said it was able to avoid an “acute threat to financial stability” by providing liquidity assistance on a “historically unprecedented scale” in order to ultimately enable the acquisition of Credit Suisse by UBS. It also highlighted his leadership of the overhaul of the Swiss payments system and its position as the first central bank to introduce central bank digital currency (CBDC) for financial market participants in tokenised form as part of a pilot project involving real transactions.
“In Thomas Jordan, a prominent figure is stepping down,” says president of the SNB council, Barbara Janom Steiner. “I deeply regret his decision. Thomas Jordan has been a defining influence on the SNB and its monetary policy for over a quarter of a century. During his time as chairman, the SNB has fulfilled its mandate outstandingly well. Thanks to its convincing monetary policy and innovative strength, the institution enjoys an excellent reputation both nationally and internationally, and is in many areas one of the world’s leading central banks. As a result of the focused organisational and personnel improvements of recent years, the SNB is ideally placed to master its important tasks in the future.”
Jordan, adds, “Having met the various challenges of recent years, now is the right time for me to step down. It has been a great privilege to serve the SNB and the interests of the country as a whole. I would like to thank the bank council, the governing board and the SNB’s staff for the excellent and collegial working relationship. 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.”