How the second part of the annual result is split between current and future distributions is governed by an agreement between the SNB and the Federal Department of Finance ( English, German). This rule operates “on the basis of double the average nominal GDP growth rate over the previous five years” or “10% of the provisions at the end of the previous year,” whatever yields higher provisions ( source ). In practice the SNB follows a mechanical rule to determine the provisions for currency reserves. The SNB decides how the annual result is split, subject to some guidance in the National Bank Law (NBG, English, German, e.g., Art. The ad hoc announcement regarding the SNB’s 2021 annual result ( English, German) provides an overview. The second part funds current and future profit distributions to the Confederation and cantons ( Ausschüttungen an Bund und Kantone) and dividend payments to SNB shareholders. The first part funds “provisions for currency reserves” ( Zuweisungen an Rückstellungen für Währungsreserven) which are meant to provide a buffer against future losses on the SNB’s asset positions. The annual result ( Jahresergebnis) of the Swiss National Bank (SNB) is split into two parts. How are SNB profits and losses distributed and what issues are debated?
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