New Swiss National Bank Chairman Schlegel stresses price stability goal

By John Revill

ZURICH (Reuters) -The Swiss National Bank's next chairman will be Martin Schlegel, the government said on Wednesday, replacing long-serving boss Thomas Jordan when he steps down at the end of September.

Speaking after his promotion from SNB vice-chairman was announced, Schlegel stressed his commitment to the central bank's mandate of ensuring price stability, defined as an inflation rate of 0-2%.

"I stand for the mandate of the national bank, that is, price stability. This is most important for the population in Switzerland and for the companies," said Schlegel, who began his career in 2004 as Jordan's intern at the SNB.

"It gives companies certainty and protects households and the population from a loss of purchasing power," he told reporters in Bern. "Stable prices are in the interests of the country as a whole."

Schlegel, who has been SNB vice chairman since August 2022, will take the helm for the remainder of Jordan's term, which runs until 2027. The role is one of the best-paid in central banking anywhere in the world, with total compensation of 1.3 million Swiss francs ($1.45 million) last year.

The 47-year-old had been widely seen as the most likely candidate both inside and outside the central bank. A Reuters poll earlier this month showed 16 out of 18 economists expected Schlegel to get the job.

Jordan said in March he would depart early after 12 years leading the SNB through a series of crises, including a sharp appreciation of the Swiss franc, the scrapping of its currency peg to the euro and the crash of Credit Suisse.

"This is the classic, safe choice by the SNB, and what was broadly expected," said Nikolay Markov, an economist at Swiss private bank Pictet.

"Schlegel has spent his entire career at the SNB and was clearly favoured by Thomas Jordan as his successor," Markov said. "It means it will be the same governance as before, with no major changes to monetary policy design or communication."

Stefen Legge, an economist at the University of St. Gallen described Schlegel as the continuity candidate.

"With the appointment of Martin Schlegel it's clear that the legacy of Thomas Jordan will be continued," said Legge.

The government also announced on Wednesday that Petra Tschudin will join Schlegel and former Federal Reserve Bank of New York executive Antoine Martin on the SNB's rate-setting governing board.

Tschudin has been a member of the expanded governing board since August 2022 and has headed the SNB's Monetary Policy Analysis unit since 2017. Martin will be promoted to Schlegel's former role of vice chairman.

Finance Minister Karin Keller-Sutter said some outside candidates had been considered.

The government's choice of two SNB insiders disappointed the SNB Observatory, a group of Swiss-based economists which has criticised the central bank for being too inward-looking.

"Outsiders broaden the experience and skill base of the Governing Board and promote a diversity of views regarding policy, limiting the risk of group-think," the Observatory said.

($1 = 0.8968 Swiss francs)

(Reporting by John Revill, additional reporting by Noele Illien; Editing by Catherine Evans)