2007 - The Swiss National Bank 1907

214981

The Swiss National Bank

1907 - 2007

Neue Zürcher Zeitung Publishing

Bibliograflsche Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografle; detaillierte bibliograflsche Daten sind im Internet

über http://dnb.d-nb.de abrufbar.

The Swiss National Bank, 1907-2007

Contributors: Werner Abegg, Ernst Baltensperger and others

Preface: Jean-Pierre Roth and Ulrich Kohli

Published by

Swiss National Bank, Zurich

© 2007 Swiss National Bank, Zurich

Distribution and sale: Neue Zürcher Zeitung Publishing, Zurich This book is protected by copyright. All associated rights reserved, particularly those pertaining to translation, reprinting, oral presentation, use of illustrations and graphics, radio broadcast, reproduction on microfllm or other media, and storage in data processing systems, whether in whole or in part. Regardless of the circumstances, this book may only be reproduced - either in whole or in part - within the limits of the legal provisions set out by the currently valid copyright law. Such reproduction is in principle subject to a fee. Violators are liable to penal provisions as set out under copyright law.

Graphic design: Heinz Egli, Zurich

Print production: NZZ Fretz AG, Schlieren

Paper: Munken Lynx, 80 gm, woodfree

Printed in Switzerland

ISBN 978-3-03823-282-7

www.nzz-libro.ch NZZ Libro is an imprint of Neue Zürcher Zeitung

Mixed Sources

Product group from well-managed

forests and other controlled sources www.fsc.org Cert no. SQS-COC-100022

© 1996 Forest Stewardship Council

Preface

One hundred years have passed since the Swiss National Bank flrst opened its doors for business on 20

June 1907. In looking back over the SNB's his-

tory, we are picking up the thread of the last three anniversary publications - those of 1932, 1957 and 1982. This time, however, we are not only presenting the view from inside, but have also been able to call upon a number of exter- nal authors. We thus decided to divide the work into three parts. The flrst part of this commemorative publication, written by three inter- nationally renowned authors, addresses the period already covered by the previous publications - the years from 1907 to 1982 - albeit from a greater distance. The second part - a review of the last twenty-flve years - was penned by members of the National Bank's own staff, in line with the previous works. For both of these parts, we asked the authors to approach the subject from a historical and critical perspective and discuss the salient developments that shaped the SNB during these periods. To do so, the contributors were given unlimited access to the SNB's archives. Adopting such a focused approach in- evitably meant foregoing completeness, while accepting a certain number of overlaps and differing interpretations. What all the authors had in common, however, was the desire to shed light on the historical backdrop, to investi- gate motives, and to highlight areas of confiict as well as ways to resolve them. The articles making up these two parts have been reproduced in three of

Switzerland's offlcial languages and in English.

The third part of this commemorative work presents a résumé of monetary policy over the last twenty-flve years, followed by seven contributions on spe- ciflc issues currently facing the Swiss National Bank and other central banks. It was written by highly qualifled experts from outside the SNB and, unlike the flrst two parts, is in English only. Given the technical nature of the mater- ial, these articles primarily address a specialist readership. However, they may also be of interest to a wider audience, as they examine the present and look ahead to the near future. Expanding the horizon in this manner further underlines how an examination of the history of an institution and the chal lenges it faces must always be seen in the context of time. Because this com- memorative work refiects views and interpretations from today's perspective, it too becomes a historical document. An Editorial Committee drawn from the staff of the National Bank was set up to assist the authors in their task. In January 2006, it organised a seminar at the SNB's Study Center Gerzensee to discuss selected chapters. Both the Governing Board and the Editorial Committee would like to thank everyone involved for all the work they have put into this book and are confldent that it will be well received in political and academic circles as well as by the gen- eral public. They hope that the articles will help to nurture a more in-depth understanding of what central bank policy entails in terms of its challenges, possibilities and limitations.

Chairman of the Governing Board

For the Editorial Committee

Preface

7

Table of contents

Part 1

From 1907 to 1982

1 From 1907 to 194:

a happy childhood or a troubled adolescence?

Michael Bordo and Harold James

1.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

1.2

Origins of central banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

1.3

Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1.4

Policy instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

1. Currency policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

1.5.1 Political risks

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

1.5.2 Return to gold

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

1.5.3 Central bank cooperation and the gold exchange standard

. . . . . . . . . . . . . . . . . . . 49

1.5.4 The controversy over devaluation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

1. International capital flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

1.7

Gold purchases and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

1.8

Lender of last resort policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

1.9

Stabilisation policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

1.9.1 Introduction

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

1.9.2 Evaluation using a modern Taylor rule

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

1.10

Post-war order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

1.11

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

1.12

Appendix I: Exchange rate policy in the 1930s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

1.12.1 Theory

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

1.12.2

Simulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Table of contents8

1.13

Appendix II: Application of the Taylor rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.1 Theory

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.2 Estimated Taylor rules for Switzerland: 1914-1945

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.3

An ex-post evaluation of SNB policy: 1914-1945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Archived sources and references . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

2 From 1945 to 1982: the transition from inward exchange controls

to money supply management under floating exchange rates

Peter Bernholz

2.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

2.2 Switzerland's emergence from isolation and the hesitant

abolition of inward exchange controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

2.2.1

Foreign trade policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

2.2.2 Monetary policy and inward exchange controls

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 The conflict between the undervaluation of the franc

and control of the money supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

The splitting of the foreign exchange market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Administrative control of the gold market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

SNB resistance to abolishing the two-tier foreign exchange

market and inward exchange controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

2.2.3 SNB involvement in the Washington Agreement of 1946 . . . . . . . . . . . . . . . . . . . . 133

2.2.4 The European Payments Union: moving towards the

convertibility of Western European currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Main features of the European Payments Union . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Discussions about Swiss membership of the EPU . . . . . . . . . . . . . . . . . . . . . . . . . 137

Switzerland's surpluses with the EPU up to 1953

and their significance for the monetary base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Dispute with the Confederation over price losses on

gold purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Switzerland's collaboration in the EPU and the transition

to the European Monetary Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

2.3

Switzerland and the Bretton Woods system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

2.3.1 Background

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

2.3.2 A break with tradition: the SNB participates in

international currency loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

2.3.3 Switzerland's collaboration in the Gold Pool and the Group of Ten

. . . . 155

Table of contents9

2.3.4 Developments up to the end of the Bretton Woods system . . . . . . . . . . . . . . . . . . 160

The Swiss National Bank

1907 - 2007

Neue Zürcher Zeitung Publishing

Bibliograflsche Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografle; detaillierte bibliograflsche Daten sind im Internet

über http://dnb.d-nb.de abrufbar.

The Swiss National Bank, 1907-2007

Contributors: Werner Abegg, Ernst Baltensperger and others

Preface: Jean-Pierre Roth and Ulrich Kohli

Published by

Swiss National Bank, Zurich

© 2007 Swiss National Bank, Zurich

Distribution and sale: Neue Zürcher Zeitung Publishing, Zurich This book is protected by copyright. All associated rights reserved, particularly those pertaining to translation, reprinting, oral presentation, use of illustrations and graphics, radio broadcast, reproduction on microfllm or other media, and storage in data processing systems, whether in whole or in part. Regardless of the circumstances, this book may only be reproduced - either in whole or in part - within the limits of the legal provisions set out by the currently valid copyright law. Such reproduction is in principle subject to a fee. Violators are liable to penal provisions as set out under copyright law.

Graphic design: Heinz Egli, Zurich

Print production: NZZ Fretz AG, Schlieren

Paper: Munken Lynx, 80 gm, woodfree

Printed in Switzerland

ISBN 978-3-03823-282-7

www.nzz-libro.ch NZZ Libro is an imprint of Neue Zürcher Zeitung

Mixed Sources

Product group from well-managed

forests and other controlled sources www.fsc.org Cert no. SQS-COC-100022

© 1996 Forest Stewardship Council

Preface

One hundred years have passed since the Swiss National Bank flrst opened its doors for business on 20

June 1907. In looking back over the SNB's his-

tory, we are picking up the thread of the last three anniversary publications - those of 1932, 1957 and 1982. This time, however, we are not only presenting the view from inside, but have also been able to call upon a number of exter- nal authors. We thus decided to divide the work into three parts. The flrst part of this commemorative publication, written by three inter- nationally renowned authors, addresses the period already covered by the previous publications - the years from 1907 to 1982 - albeit from a greater distance. The second part - a review of the last twenty-flve years - was penned by members of the National Bank's own staff, in line with the previous works. For both of these parts, we asked the authors to approach the subject from a historical and critical perspective and discuss the salient developments that shaped the SNB during these periods. To do so, the contributors were given unlimited access to the SNB's archives. Adopting such a focused approach in- evitably meant foregoing completeness, while accepting a certain number of overlaps and differing interpretations. What all the authors had in common, however, was the desire to shed light on the historical backdrop, to investi- gate motives, and to highlight areas of confiict as well as ways to resolve them. The articles making up these two parts have been reproduced in three of

Switzerland's offlcial languages and in English.

The third part of this commemorative work presents a résumé of monetary policy over the last twenty-flve years, followed by seven contributions on spe- ciflc issues currently facing the Swiss National Bank and other central banks. It was written by highly qualifled experts from outside the SNB and, unlike the flrst two parts, is in English only. Given the technical nature of the mater- ial, these articles primarily address a specialist readership. However, they may also be of interest to a wider audience, as they examine the present and look ahead to the near future. Expanding the horizon in this manner further underlines how an examination of the history of an institution and the chal lenges it faces must always be seen in the context of time. Because this com- memorative work refiects views and interpretations from today's perspective, it too becomes a historical document. An Editorial Committee drawn from the staff of the National Bank was set up to assist the authors in their task. In January 2006, it organised a seminar at the SNB's Study Center Gerzensee to discuss selected chapters. Both the Governing Board and the Editorial Committee would like to thank everyone involved for all the work they have put into this book and are confldent that it will be well received in political and academic circles as well as by the gen- eral public. They hope that the articles will help to nurture a more in-depth understanding of what central bank policy entails in terms of its challenges, possibilities and limitations.

Chairman of the Governing Board

For the Editorial Committee

Preface

7

Table of contents

Part 1

From 1907 to 1982

1 From 1907 to 194:

a happy childhood or a troubled adolescence?

Michael Bordo and Harold James

1.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

1.2

Origins of central banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

1.3

Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1.4

Policy instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

1. Currency policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

1.5.1 Political risks

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

1.5.2 Return to gold

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

1.5.3 Central bank cooperation and the gold exchange standard

. . . . . . . . . . . . . . . . . . . 49

1.5.4 The controversy over devaluation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

1. International capital flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

1.7

Gold purchases and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

1.8

Lender of last resort policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

1.9

Stabilisation policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

1.9.1 Introduction

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

1.9.2 Evaluation using a modern Taylor rule

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

1.10

Post-war order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

1.11

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

1.12

Appendix I: Exchange rate policy in the 1930s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

1.12.1 Theory

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

1.12.2

Simulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Table of contents8

1.13

Appendix II: Application of the Taylor rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.1 Theory

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.2 Estimated Taylor rules for Switzerland: 1914-1945

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

1.13.3

An ex-post evaluation of SNB policy: 1914-1945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Archived sources and references . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

2 From 1945 to 1982: the transition from inward exchange controls

to money supply management under floating exchange rates

Peter Bernholz

2.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

2.2 Switzerland's emergence from isolation and the hesitant

abolition of inward exchange controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

2.2.1

Foreign trade policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

2.2.2 Monetary policy and inward exchange controls

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 The conflict between the undervaluation of the franc

and control of the money supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

The splitting of the foreign exchange market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Administrative control of the gold market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

SNB resistance to abolishing the two-tier foreign exchange

market and inward exchange controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

2.2.3 SNB involvement in the Washington Agreement of 1946 . . . . . . . . . . . . . . . . . . . . 133

2.2.4 The European Payments Union: moving towards the

convertibility of Western European currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Main features of the European Payments Union . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Discussions about Swiss membership of the EPU . . . . . . . . . . . . . . . . . . . . . . . . . 137

Switzerland's surpluses with the EPU up to 1953

and their significance for the monetary base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Dispute with the Confederation over price losses on

gold purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Switzerland's collaboration in the EPU and the transition

to the European Monetary Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

2.3

Switzerland and the Bretton Woods system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

2.3.1 Background

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

2.3.2 A break with tradition: the SNB participates in

international currency loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

2.3.3 Switzerland's collaboration in the Gold Pool and the Group of Ten

. . . . 155

Table of contents9

2.3.4 Developments up to the end of the Bretton Woods system . . . . . . . . . . . . . . . . . . 160