Report22 May 2018Updated about 2 months ago

The Swiss Vollgeld referendum: Prepare for another Brexit shock?

The Swiss vote on monetary reform on 10 June. A "Yes" to Vollgeld is a low-probability but high-impact event. Ring any Brexit bells?

Executive summary

On 10 June, the Swiss vote on a fundamental monetary reform. The probability of a “yes” may be underestimated, as was the case with the Brexit referendum.

The short-term impact of a “yes” would be great uncertainty but, in the longer term, Vollgeld could hurt the economy, have important redistributive consequences and greatly increase the role of the state in the economy. The CHF will suffer from a “yes” in the short run, but conservative monetary policy and safe haven status may be a CHF positive in the longer run.

In this report, we examine what Vollgeld is and why it's so important. We suggest this is a fundamental reform with wide-ranging consequences, many of which haven't been thoroughly though through.