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At the Swiss National Bank’s Money Market Event in Geneva on Oct. 29, 2026, Petra Tschudin and Thomas Moser described how the bank provides liquidity against eligible collateral. They said the SNB GC Basket supports monetary policy and payments, while collateral requirements limit the bank’s credit risk. The SNB said it reviews its policy as market conditions and technology change.
Swiss National Bank officials Petra Tschudin and Thomas Moser outlined the central bank’s approach to providing liquidity against collateral at an SNB Money Market Event in Geneva on Oct. 29, 2026. They said the framework protects the SNB from credit risk while supporting monetary policy implementation, cashless payments and liquidity flows between financial institutions.
The officials said the SNB provides central bank liquidity to the financial system to carry out statutory tasks set out in the National Bank Act. Those tasks include supplying the Swiss franc money market with liquidity, supporting cashless payments and contributing to financial stability. The Geneva event focused on the first two purposes, according to the speech.
The SNB’s collateral policy establishes which assets can secure its credit and repo transactions. Tschudin and Moser said the policy is designed to be effective, efficient and transparent: eligible assets must be legally and operationally usable, and collateral must be capable of being mobilised reliably when liquidity is needed. If a counterparty cannot meet its obligations, the SNB can sell pledged collateral to limit potential losses.
The officials identified the SNB GC Basket as an important part of the framework. They said it combines high quality requirements with a broad international focus, and has become a collateral standard in the Swiss interbank repo market. A shared standard and integrated market infrastructure make it easier to mobilise collateral, the speech said, helping monetary operations and payments function effectively.
Collateral Links Liquidity and Payments
The policy affects more than the SNB’s own risk management. It shapes how eligible assets can be used to obtain central bank liquidity and how banks redistribute liquidity among themselves in the money market. For banks, common collateral requirements and market infrastructure can affect how quickly and reliably they meet short-term funding needs.
For the wider financial system, the arrangements matter because payments must settle throughout the day even when incoming and outgoing transactions do not coincide. The SNB said banks may need additional liquidity at short notice to keep payments moving. Its collateral rules determine the terms on which that central bank liquidity can be made available, while the requirement for sufficient collateral helps protect the SNB’s balance sheet and its capacity to carry out its mandate.
The speech also connects collateral policy with monetary policy operations. The SNB uses repo transactions to provide or absorb liquidity in order to keep short-term money-market rates close to its policy rate. The precise direction of operations depends on conditions: the officials said that in the current environment described in the speech, with a non-negative policy rate and liquidity still high, open-market operations are used to absorb liquidity.
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How SNB Liquidity Is Used
The speech distinguishes three reasons the SNB may provide liquidity. First, it uses repo transactions in the Swiss franc money market to implement monetary policy. The officials recalled that during the period of negative interest rates, the SNB sometimes supplied liquidity even when the financial system already had high liquidity, aiming to counter temporary upward pressure on short-term market rates.
Second, liquidity can help banks manage payment timing. Banks process payments for themselves and customers across the day, and a temporary mismatch between payments received and sent can create a short-term need for funds. Third, the SNB can provide liquidity support when a bank’s own buffers are no longer sufficient, as part of its contribution to financial stability. The officials cited support provided during the Credit Suisse crisis as an example, while saying the event’s main focus was market liquidity and payments.
The National Bank Act requires the SNB to provide liquidity only against sufficient collateral, according to the speech. The officials described the requirement as a safeguard against counterparty credit risk and a condition for the SNB to perform its duties over the long term. The bank said its collateral policy is reviewed on an ongoing basis and adjusted when market conditions or technology change.
“The SNB provides the financial system with central bank liquidity. It always does so against collateral, and this has to meet requirements set out by the SNB in its collateral policy.”
— Petra Tschudin and Thomas Moser, in an SNB speech
Policy Changes Not Detailed
The speech describes the SNB’s principles and the role of the GC Basket, but the supplied material does not identify a specific policy change announced on Oct. 29. It also does not provide a timetable for revisions, name particular assets being added or removed, or set out detailed eligibility thresholds. The officials’ statement that the policy is reviewed regularly does not by itself indicate that a change is imminent.
The speech material also does not quantify the amount of liquidity currently absorbed through open-market operations or give figures for payment-related liquidity provision. It describes the SNB’s stated approach, rather than providing a new operational announcement or a forecast of future money-market conditions.
Ongoing Review of Eligible Collateral
The SNB said it will continue reviewing its collateral policy and make adjustments as needed in response to market conditions and technological developments. The speech does not specify when the next review will conclude or whether it will produce changes to the GC Basket or other eligibility rules.
For market participants, the next relevant development would be any formal SNB communication that changes collateral requirements or explains how revised arrangements will work in practice. Until such an announcement is made, the Oct. 29 speech is best read as an explanation of the existing framework and the principles guiding its ongoing review.
Key Questions
What did the SNB officials discuss on Oct. 29, 2026?
Petra Tschudin and Thomas Moser explained how the SNB provides central bank liquidity against collateral and how the policy supports monetary operations and payments.
Why does the SNB require collateral?
Collateral limits the SNB’s exposure if a counterparty cannot meet its obligations. The officials said the SNB can sell pledged assets to avoid or limit a loss.
What is the SNB GC Basket?
It is a basket of collateral that the officials described as having high quality requirements and a broad international focus. They said it has become a collateral standard in the Swiss interbank repo market.
Did the speech announce new collateral rules?
The supplied speech material outlines the SNB’s approach and says the policy is reviewed on an ongoing basis, but it does not specify a new rule or a timetable for changes.
How does SNB liquidity support payments?
Banks may face short-term funding needs when payments arrive and leave at different times. The SNB said it can provide liquidity when necessary to support smooth and efficient cashless payments, subject to its collateral requirements.
Source: snb.ch
