The Swiss National Bank (SNB) has published a detailed operational framework for an Extended Liquidity Facility (ELF) intended to supply contingent liquidity support to banks based in Switzerland.
Under the standardized ELF process the SNB has defined, participating banks will be able to obtain liquidity rapidly by pledging eligible collateral. The framework permits two broad categories of collateral: mortgages and securities. The SNB has set out rules that govern which assets qualify and how collateral values will be adjusted.
To validate the ELF procedures and technical interfaces, the SNB will conduct testing with a set of pilot banks together with infrastructure providers SIX Terravis and SIX SIS. That testing phase will continue through mid-2026. The central bank has set the operational start date for the facility at the beginning of 2027, citing the aim of reinforcing the stability of the Swiss banking system.
Several formal documents detailing the ELF have been released on the SNB's website. These include Guidelines on Liquidity Support, an ELF Instruction Sheet, and an ELF Declaration of Participation - the latter acting as the initial step for banks that wish to enter the facility.
Additional papers specify the mechanics of collateral and lending under the ELF. The ELF Conditions for Collateral set out eligible collateral types and the haircuts to be applied to both mortgage and securities collateral. The ELF Conditions for Drawing of Loans describe loan terms and the interest rates that will apply when banks draw liquidity.
The SNB expects to supply complete ELF documentation, which will include contracts and detailed operational instructions, to eligible banks in summer 2026. The staged approach - documentation, pilot testing, then operational launch - is intended to ensure that the facility functions as designed when it becomes available in 2027.
What this means
- The SNB has established a formal, standardized channel for emergency or contingent liquidity that accepts both mortgages and securities as collateral.
- Pilot testing with market infrastructure partners and selected banks will run until mid-2026, with full operational use planned for early 2027.
- Comprehensive documentation, including contracts and instructions, is scheduled to be distributed to eligible banks in summer 2026.