SNB chairman says Fed independence 'important for the world'

By John Revill

DAVOS, Switzerland, Jan 21 (Reuters) - Central slope independency is important to controlling inflation, Swiss National Bank Chairman Martin Schlegel said connected Wednesday, arsenic the U.S. Federal Reserve seat faces a transgression probe and an onslaught of ​attacks from President Donald Trump.

The SNB was 1 of respective cardinal banks that lined up successful enactment of Jerome Powell ‌last week aft Trump's Justice Department threatened him with a transgression indictment.

Powell has called the investigation, which is looking into the renovation of 2 Fed buildings successful ‌Washington, a pretext to enactment unit connected the cardinal slope to chopped rates, arsenic Trump has repeatedly called for it to do.

"Central slope independency is precise important. A cardinal slope needs to beryllium autarkic to fulfil its mandate, which is terms stability," Schlegel told Reuters connected the sidelines of the World Economic Forum successful Davos, Switzerland.

"The Fed is simply a precise important cardinal bank. Not lone for the U.S., it's precise important besides ⁠for the satellite ... It's truly important that the ‌Fed is independent," helium said. "Typically, erstwhile a cardinal slope is not independent, ostentation is higher."

SAFE-HAVEN SWISS FRANC RISES AS GLOBAL TURBULENCE RETURNS

Recent planetary governmental turbulence has triggered an appreciation successful the Swiss franc, traditionally seen ‍by investors arsenic a harmless haven, Schlegel said.

The franc gained astir 14.5% against the dollar past year, its strongest yearly show since 2002, arsenic Trump's planetary tariff violative disrupted planetary commercialized and rattled investors.

The U.S. president has revived fears of a commercialized warfare with Europe, threatening caller tariffs against countries ​opposing his ambition to instrumentality implicit Greenland. The franc has gained 1.4% this week, having different remained dependable for astir of January ‌prior to that.

This appreciation reduces the worth of the SNB's dollar-denominated assets, with dollar holdings making up astir 36% of its 765 cardinal francs ($966 billion) successful overseas currency reserves.

Schlegel said the SNB considered the liquidity of its assets arsenic good arsenic the stableness of their worth but did not remark straight connected whether the speech complaint displacement would pb to the SNB reducing its dollar holdings.

"What's important for america is diversification, with currencies, truthful U.S. dollars, euro, and truthful on, but besides successful different instruments, authorities bonds, firm bonds, and besides ⁠equities," helium said.

"So we are looking astatine our concern beingness constantly, and ​we are capable to marque decisions if necessary."