The Swiss National Bank is adjusting emuneration on sight deposits, lowering the threshold factor applied in the tiered remuneration of sight deposits and no longer paying interest on SDs that meet minimum reserve requirements.

Adjustments will both ensure that monetary policy implementation remains effective and will reduce interest costs for the SNB, a statement published Monday said, although noting the changes have no impact on the current monetary policy stance.

As of Dec 1, the SNB will lower the threshold factor for the remuneration of sight deposits of account holders subject to minimum reserve requirements from 28 to 25. For sight deposits up to this threshold, the SNB policy rate will be applied. Sight deposits above the threshold will be remunerated at the SNB policy rate minus a discount of 0.5 percentage points.

There have been expectations the ECB will again move to tweak remunnerations on reserves, but any change is likely to come alongside the outcome of the ongoing operation framework review. (MNI POLICY: ECB Saves Look At Balance Sheet Cuts For Late '23)