Criticizing Central Bank Governance: Professor Yvan Lengwiler’s Scathing Review of National Bank Appointments

Professor Yvan Lengwiler, a renowned economist at Basel University, has issued a scathing critique of the recent appointments made by the National Bank (SNB) to its board of directors. According to Lengwiler, the lack of diversity and experience on the board is weakening the bank’s leadership. He has been an outspoken advocate for greater representation from outside the central bank on the SNB’s governing body.

Lengwiler was particularly critical of Martin Schlegel’s appointment as President of SNB, as he believes that his extensive career within the institution makes him unsuitable for such an important position. Lengwiler was surprised that the Federal Council did not wait for a PUK report before making this decision and expressed concerns about transparency in these crucial appointments.

In addition to his criticism of Schlegel’s appointment, Lengwiler highlighted other issues with governance at SNB, such as a lack of transparency in monetary policy decisions and profit distribution to federal governments and cantons. He called for reforms at SNB, including term limits for board members and a stronger emphasis on collective decision-making within the Governing Board.

Despite acknowledging SNB’s independence, Lengwiler believes that it should be subject to external evaluations and accountability mechanisms to ensure that it operates in an open and transparent manner. He also criticized SNB’s handling of UBS crisis and called for improvements in its emergency liquidity strategy and collateral acceptance policies.

Overall, Lengwiler advocates for significant changes at SNB to improve its governance, transparency, and decision-making processes. He emphasizes the importance of diverse perspectives on the board of directors and calls for a more open approach to central bank operations.

In conclusion, Professor Yvan Lengwiler has raised several valid concerns about governance issues at SNB through his critical analysis of recent appointments made by National Bank. His advocacy for reforms at SNB can help ensure that this crucial institution operates effectively while maintaining its independence within Switzerland’s democratic system.