Federal Council decides on bilateral loan to International Monetary Fund
Bern, 12.10.2017 - During its meeting on 11 October 2017, the Federal Council resolved to bring the revision of the Monetary Assistance Act into force on 1 November 2017 and decided that Switzerland would grant the International Monetary Fund (IMF) a loan of CHF 8.5 billion.
The Monetary Assistance Act (MAA) empowers the Confederation to provide monetary assistance in the form of loans, guarantee liabilities and non-repayable contributions. The revision of the MAA was necessary due to changes to lending practices at the multilateral level. The most significant adjustment makes provision for an increase in the maximum term for monetary assistance from seven to ten years. With the entry into force of the revision, the requirements are met for Switzerland to be able to grant a bilateral loan to the IMF with a ten-year repayment period. The Federal Council has instructed the Swiss National Bank (SNB) to grant the IMF a loan of CHF 8.5 billion. The Confederation will give the SNB a guarantee for timely repayment.
Switzerland's involvement is part of the renewal of the bilateral credit lines granted to the IMF in 2012. Due to persisting uncertainties in the financial system, the IMF decided in October 2016 to extend these bilateral credit lines totalling approximately USD 425 billion. This ensures that the IMF has the appropriate resources to carry out its mandate to stabilise the international monetary and financial system effectively and credibly in the event of serious crises. As an open economy with a major financial centre and its own currency, Switzerland is reliant upon a stable international financial and monetary system, with the IMF as a pillar or rather protective shield against systemic risks.
Address for enquiries
Anne Césard, Communications State Secretariat for International Financial Matters SIF
Tel. +41 58 462 62 91, anne.cesard@sif.admin.ch
Publisher
The Federal Council
https://www.admin.ch/gov/en/start.html
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
