Or, expressed in a different way, without the countryside uprising in the name of liberal ideas, 184 years ago, we might not have the SNB today. In my presentation, I will, for once, devote less attention to current monetary policy. Instead, I will examine the Swiss monetary system from a more long-term perspective. My aim is to show you the significance of sound money, and why it is a major pillar of our society. In this context, I will also take a critical look at four proposals to reform the monetary system. My reason for doing this is that interventions of this kind in an existing monetary order can have grave consequences for our country and the entire population. Talking of reform proposals: In the “Uster Memorial” document there is a demand which particularly appeals to me as a central banker, that, in the case of property charges such as tithes, it should be possible to transform them easily into mortgage claims whose interest level is appropriate. Appropriate interest rates or “appropriate monetary conditions”, as it is expressed in central bankers’ jargon – that is what modern monetary policy is all about. So you see that the demands made in Uster remain just as valid today.
In other words, the Swiss franc already faces competition, not only against the currencies of other countries but also against alternative non-governmental currencies. 8  4  For further information, cf. ‘Bericht des Bundesrates zu virtuellen Währungen’ (Federal Council report on virtual currencies, in German only) of 25 June 2014 (www.news.admin.ch/NSBSubscriber/message/ attachments/35361.pdf). BIS central bankers’ speeches  However, the key issue is rather different. A modern economy with a well-developed financial market requires a statutory means of payment. The Swiss franc is the official unit of currency in our country; Confederation coins as well as SNB banknotes and sight deposits are Switzerland’s statutory means of payment. Therefore these instruments must be accepted as payment in this country by every individual, without restriction, unless otherwise agreed. A statutory means of payment creates legal certainty and efficiency in everyday life. Consequently, the governmental Swiss franc is indispensable in Switzerland, even in a situation of competition with private currencies. Moreover, as long as a central bank fulfils its mandate diligently, I do not consider it likely that a private currency can pose any serious competition to a state currency. Return to a gold standard The second reform idea, the return to a gold standard, is directly linked to the financial crisis. In some circles there are fears of massive inflation in the short or long-term as a result of the unprecedented relaxation in monetary policy worldwide. The solution that is sometimes proposed is a return to a gold standard, in other words, pegging the currency to gold.