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The Swiss National Bank (SNB) is enhancing its liquidity support framework with the introduction of the Extended Liquidity Facility (ELF). This move aims to improve banks’ access to liquidity while reducing associated stigma. The ELF builds on the existing Emergency Liquidity Assistance (ELA) framework, extending support to all Swiss banks.
- The SNB's ELA framework, formalized in 2003, requires liquidity assistance to be provided only to solvent banks with sufficient collateral.
- In 2023-2024, the SNB expanded liquidity support to all Swiss banks, accepting mortgages and securities as collateral.
- The new ELF framework reduces stigma around liquidity support and aligns it more closely with standard central bank operations.
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Other Tags: Central Bank Actions, Swiss National Bank (SNB)