ZURICH (Reuters) – The Swiss National Bank (SNB) must retain flexibility on how it invests its massive foreign currency pile, board member Andrea Maechler said on Wednesday, warning a shift to only green investments would hurt its monetary policy.
The SNB is a big global investor, with foreign currency assets close to 1 trillion Swiss francs ($1 trillion) acquired during its long campaign to stem the appreciation of the Swiss franc.
The central bank has faced calls from environmentalists to use its investments to influence companies linked to climate change. But Maechler told an event in Zurich that wasn’t the SNB’s job.
“We don’t have the goal to make the world greener. That’s not our mandate,” Maechler said. “The balance sheet must fulfill the monetary policy goals.”
The SNB aims for price stability, a goal it is targeting by slowing the appreciation of the franc via forex interventions and negative interest rates.
Maechler said limiting the SNB’s investments would hurt its flexibility, vital to maintain an independent monetary policy.
“We need an extremely broad diversification to reduce the risks,” Maechler said. “Flexibility must be maintained.”
The SNB invested passively by buying stocks to mirror their weight in indexes, and did not engage in stock picking, limiting its ability to follow environmental criteria, she added, although the bank did not buy stocks in companies primarily involved in mining coal.
Still, the central bank has drastically reduced its share of equity investments in energy companies from 11% to 3% over the last 10 years, Maechler added, following changes to their market value.
($1 = 0.9177 Swiss francs)
Reporting by John Revill; Editing by David Holmes
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