Tag Archives: Swiss National Bank

On 18 June 2020, the Swiss National Bank (SNB) said it would maintain its negative rate of interest (-0.75%) and remains willing to intervene more strongly in the foreign exchange market. © Marekusz | Dreamstime.comThe coronavirus pandemic has led to a severe downturn in economic activity and a decline in inflation both in Switzerland and abroad. The bank presented a new lower inflation forecast than the one it issued in March 2020. The red line in the chart above shows deflation...

FAS, 31 May 2020. PDF. Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives....

FAS, 31 May 2020. PDF. Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives.

On the SNB website, Lukas Heim and Christoph Kappeler explain the integration of the financial account, the international investment position and the Swiss financial accounts.

Swiss Franc The Euro has risen by 0.02% to 1.0515 EUR/CHF and USD/CHF, May 12(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: Investors seem to be in want of new drivers, leaving the capital markets with little fresh direction. While Japanese and China equities were little changed, several markets in the region, including Australia, Hong Kong, Taiwan, and India, were off more than 1%. European bourses are mostly...

The increasing volatility of SNB Earnings Annual results are not really definite. Given that the SNB accumulates foreign currencies with interventions, they have huge swings. But the SNB may lose 50 billion in one year and win 60 billion in the next year or vice verse. Franc will rise again with crisis or inflation With a new financial crisis or a with a big rise of inflation, the run into the Swiss franc will start again. Deflationary period (e.g. Corona Crisis)...

On 26 March 2020, the Swiss National Bank (SNB) announced it would lend unlimited money to banks to shore up the economy. © Swisshippo | Dreamstime.comIts COVID-19 refinancing facility (CRF), is aimed at strengthening the supply of credit to the Swiss economy by providing the banking system with additional liquidity. The SNB said there would be no upper limit on the amounts available, and drawdowns could be made by banks at any time, enabling banks to expand their lending rapidly and on...

Valor, 14 April 2020. PDF. Short interview on the implications of the Covid-19 shock for businesses, pensions, government finances, and asset markets. Longer online interview and video.

How Switzerland peps up SMEs: Banks are encouraged to extend credit (at 0%). The treasury guarantees the loans. The SNB refinances banks and accepts the guaranteed loans as collateral. Fast and efficient. Eventually, some of these loans will turn into grants of course. But that’s ok; the first-best response to a shock with asymmetric effects does involve transfers if markets are incomplete. You Might Also Like...

How Switzerland peps up SMEs: Banks are encouraged to extend credit (at 0%). The treasury guarantees the loans. The SNB refinances banks and accepts the guaranteed loans as collateral. Fast and efficient. Eventually, some of these loans will turn into grants of course. But that’s ok; the first-best response to a shock with asymmetric effects does involve transfers if markets are incomplete.