Economic Survey of Switzerland 2009


Contents | Executive summary | How to obtain this publication | Additional information 



The next Economic Survey of Switzerland will be prepared for 2011.


An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared.

The OECD assessment and recommendations on the main economic challenges faced by Switzerland are available by clicking on each chapter heading below.


See also: Raising education outcomes in Switzerland, OECD Economics Department Working Paper, No.838, February 2011.




Chapter 1. Getting out of the crisis

As in most OECD countries, the global financial crisis pushed the Swiss economy into recession. However, despite the weight of financial intermediation in economic activity and significant losses of the large internationally active Swiss banks in the US subprime mortgage market, Switzerland has so far performed better than most OECD economies. This relatively benign course of events reflects the sectoral specialisation of manufacturing, the financial health of the domestically-oriented smaller banks, the absence of a housing cycle and a monetary stance that turned expansionary relatively early on. Nonetheless, the current recession is likely to lead to high unemployment part of which risks becoming persistent. Also, deflation risks rose as core inflation was getting closer to zero. In the medium term, the fall out of the global financial crisis for Switzerland could be substantial: scope for expansion of financial services may have diminished and the weakness of trend productivity growth appears to continue, denting the still significant lead of Switzerland‘s living standards vis à vis many other OECD countries. Furthermore, the impact of the global financial crisis on the government’s finances will be substantial and lasting, while ageing related spending pressures mount in the longer term.


Chapter 2. Swiss Monetary Policy in the Current Crisis and Beyond

Decisive action by the Swiss National Bank (SNB) since the outbreak of the crisis has supported financial stability and economic activity. A distinct monetary framework that directly targets the three-month interbank market rate (the Swiss franc Libor) has also helped support domestic credit conditions by limiting the rise in money market spreads compared to other currency areas since the onset of financial market turbulence. With the deepening of the crisis and growing deflationary pressures, the SNB turned to unconventional measures to provide further stimulus, including exchange rate interventions. The sizeable lending activity of Swiss banks in foreign currencies raises the demand for liquidity in foreign currency at times of crisis. It must be ensured that this demand can be met, for example by continued co-operation with other central banks on swap arrangements. Carry trade in Swiss francs has followed the global financial market cycle and has influenced recent exchange rate developments which played a determining role in monetary policy when it was constrained by interest rates reaching zero.


Chapter 3. Containing the systemic risks from exceptionally large financial institutions

The Swiss financial system has weathered the international financial crisis despite the severe losses of its two largest banks and a considerable loss of one of its insurance companies, in part because the authorities moved quickly when the crisis broke in the fall of 2008. However the comparatively large magnitude of the losses of its two largest banks in relation to capital has underscored the systemic risks to the economy posed by the institutions’ large size relative to Swiss GDP and their extensive cross-border and cross-currency activities. While the Swiss financial regulatory apparatus has been greatly improved during this decade, further steps need to be taken to better contain the systemic risks. Prudential standards for the two largest Swiss banks will need to be above the average maintained by their peers in other countries. Macro-prudential oversight needs to be further strengthened and broadened. The existing cooperative arrangements with financial authorities in other countries need to be expanded for the largest Swiss banks and insurance companies and for crisis management in the event of future problems.


Chapter 4. Lowering the high cost of housing and construction

Renting accommodation in Switzerland is considerably more expensive than in other OECD countries with high per capita income, especially for households on modest incomes. High costs in the construction industry, where geographic fragmentation still restricts competition, are one contributing factor. Moreover, legislation limits rent adjustments to market conditions for incumbent tenants even over long periods of time and restrictions to increases in rents also apply when there is a change of tenant. These rules are likely to privilege incumbent tenants compared to more mobile parts of the population and may distort rental prices of old relative to new housing stock, keeping the former relatively low. Hence they may distort incentives to invest in the maintenance of existing housing. Supply of affordable housing also appears to be held back by a relatively low building density in sub urban areas. Strengthening sub national governments’ incentives to attract more population with low or medium income levels could help increase density, for example, by mitigating the incentives to compete for high income households resulting from tax competition and by increasing the share of municipalities’ tax revenues raised from taxation of real estate.


Chapter 5: Raising education outcomes

Almost all workers are educated at least to the upper secondary level and vocational education contributes to one of the most successful transition performances of youth to employment in the OECD. Higher education enjoys an excellent reputation, as reflected in one of the highest scientific publication rates relative to population in the OECD and high placements of Swiss universities in international rankings. Participation in continuous education is among the largest in the OECD. Results for children with low socio-economic background or immigration background do not fully measure up to the high standards of the education system. Improving early childhood education and availability of childcare facilities for very young children would raise subsequent educational attainment, especially for these groups of children. Accountability of schools for their education outcomes should be raised. In tertiary education, attainment rates among the young are modest for a high-income OECD country, reflecting the importance of the upper secondary vocational system. A larger supply of tertiary graduates could have benefits for productivity performance especially in the context of demographic ageing. Public spending per pupil on pre-primary education is low in international comparison whereas spending on tertiary academic education per graduate is among the highest in the OECD. 

See also: Raising education outcomes in Switzerland, OECD Economics Department Working Paper, No.838, February 2011.

How to obtain this publication


The complete edition of the Economic Survey of Switzerland is available from:

The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations. 


Additional information

For further information please contact the Switzerland Desk at the OECD Economics Department at

The OECD Secretariat’s draft report was prepared by Andrés Fuentes, Charles Pigott and Eduardo Camero under the supervision of Pierre Beynet. Statistical assistance was provided by Patrizio Sicari. The survey also benefited from external consultancy work.

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