Thomas Jordan, the president of the Swiss central bank, at the presentation of a new Swiss banknote yesterday didn't utter one word about monetary policy. The bank only ever comments when absolutely necessary. A habit that has less to do with Swiss people's quiet nature and a lot with common sense.

The «Wall Street Journal» today published a background story about the communication policy of the Swiss National Bank (SNB), the country's monetary authority, using the presentation of a new 50-franc-note as excuse.

Thomas Jordan, the president of the SNB, didn't say a word about monetary policy matters at the presentation, prompting the article in the U.S. broadsheet. Of course, in Switzerland nobody expected him to say anything about the bank's future policy on interest rates.

Legendary Policy

The bank's reticence is legendary and stands in stark contrast to some other central banks, not least the European Central Bank (ECB). The newspaper notes that the ECB members of the directorate use almost every opportunity to feed the markets with its latest views.

«The SNB is on balance less transparent than the ECB or the Federal Reserve or the BOE or the (Swedish) Riksbank or the Bank of Norway,” Stefan Gerlach, chief economist at BSI Bank, told the «Wall Street Journal». Gerlach was deputy governor of Ireland's central bank until last year.

Too Much Is Dangerous

The SNB doesn't try to influence expectations of market participants and thereby the economy with soundbites. Jordan didn't do so when he announced the lifting of the franc-peg on January 15, 2015, a historic decision with far-reaching consequences for the Swiss economy.

Some commentators criticized the bank for its communication policy after the announcement, claiming that the SNB should have prepared the market, the economy and politics for the fundamental change in policy.

The U.S. broadsheet rightly asks whether central bankers really have to talk as much and comments that Swiss central bank's policy may be an example others should follow, given the penchant of investors to follow every single word of the policy makers.

A Model Policy

The «Wall Street Journal sees two advantages in the way the Swiss communicate. First, the bank can't be criticized for breaking promises it hasn't given. And second, the economy becomes less dependent on the bank's decisions.

The real reason for the SNB's policy of not talking too much however is the vulnerability of the Swiss economy, the newspaper concludes. One word may suffice to send the franc shooting through the roof, with catastrophic consequences for the producing industry.

Transparency Is Overrated

Which is why Jordan sticks to the habit established by his predecessors: it's better to say little than one word too much. Even the minutes of its meetings, the explanations of the monetary policy, are much less explicit than those of other institutes.

«Sometimes, transparency can be counterproductive,» Jordan said two years ago. The SNB President has changed his stance since then, a spokesman told the «Wall Street Journal».