Category Archive: SNB

Latest SNB Intervention Update: Weekly Sight Deposits (continuously updated)

We explain what sight deposits at the SNB mean, namely an asset from the commercial banks’ view and a liability from the SNB view. Latest IMF data and weekly Sight Deposits at the SNB suggests a shocking insight: the central bank was selling dollars.

Permanent link to this article: http://snbchf.com/snb/history-of-snb-sight-deposits/

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Rising Sight Deposits at SNB Means Rising SNB Debt

Money creation and sight deposits may have two points of view:
1. The central bank creates money – i.e. the SNB decides to increase sight deposits when it does currency interventions
2. Commercial banks create money – inflows in CHF on Swiss bank accounts make those banks increase their “sight deposits at the SNB. If inflows in CHF are higher than outflows then CHF must rise, unless the central bank does currency interventions.
We will present both alternatives.

Permanent link to this article: http://snbchf.com/snb/snb-sight-deposits-debt/

The Last Free Lunch for Holders of SNB’s High-Risk Share?

Marc Meyer, the maybe strongest opponent of the Swiss National Bank criticizes the misleading vocabulary in monetary policy that confuses central bank liabilities with assets. He identifies the intrinsic and time value of the SNB share. According to Meyer, the recent strong share price performance was caused by the free lunch at the shareholder assembly.

Permanent link to this article: http://snbchf.com/snb/free-lunch-snb-high-risk-share/

SNB’s IMF data

Permanent link to this article: http://snbchf.com/snb/imf-data/

Where does SNB intervene against overvalued CHF, do they sell EUR & USD? (April Update)

In his first response to the Swiss financial tsunami on January 15, George Dorgan suggested that the EUR/CHF of 1.10 will not be reached any time soon. He explains where the SNB should intervene and if they sell Euros and dollars.

Permanent link to this article: http://snbchf.com/snb/end-chf-cap-snb-intervention/

What Caused The SNB Financial Tsunami? Three Reasons, One Trigger, One Chain Reaction

In this post we give our (Swiss) view for the financial tsunami on January 15.
The SNB has preferred its secondary mandate, namely financial stability, and the elimination of risks on its own balance sheet caused by ECB QE.
It will not obey its primary target, price inflation, for the next three to five years. While in the mid-term (5 -10 years) inflation should move up.
Differing perceptions between Switzerland and the Anglophone world about “price stability in the medium and long-term” is the second explanation for the financial tsunami.
The massive trade surplus of 10% of GDP is the third reason.

Permanent link to this article: http://snbchf.com/snb/swiss-financial-tsunami/

2014 Results: SNB expects profit of CHF 38 billion

The Swiss National Bank will report a profit of CHF 38 billion. They obtained price gains in all asset classes, in bonds, stocks and gold. Interest payments and dividends achieved a yield of 1.7%.

Permanent link to this article: http://snbchf.com/snb/2014-results/

The Risks on the Rising SNB Money Supply

Since the financial crisis central banks in developed nations increased their balance sheets. The leading one was the American Federal Reserve that increased the monetary base (“narrow money”), followed by the Bank of Japan and recently the ECB. Only partially the extension of narrow money had an effect on banks’ money supply, so called “broad money”. For the Swiss, however, the rising money supply concerns both narrow and broad money. Broad money in Switzerland rises as strong as it did in Spain or Ireland before the financial crisis.

Permanent link to this article: http://snbchf.com/snb/risks-on-rising-snb-money-supply/

December 2014: SNB Introduces Negative Rates, a Toothless Measure?

The Swiss National Bank has introduced negative interest rates. They apply only to sight deposits in excess of 20 times minimum reserves. Therefore they will affect hardly any bank and can be considered symbolic or even toothless. The view of the SNB is different.

Permanent link to this article: http://snbchf.com/snb/snb-negative-rates-toothless/

SNB has Won the Risk Aversion Battle, When Will the Inflation Battle Start? (Update after the CHF peg)

With the weakening of emerging markets and the strengthening of the United States in 2013/2014, the Swiss National Bank (SNB) has won the first battle in the war against financial market, the “risk aversion battle”, the first inning in two-part match. We judge that until the second battle, the “inflation battle” starts, some time will pass, time to go for higher wages in the United States and (Northern) Europe.

Permanent link to this article: http://snbchf.com/snb/snb-has-won-the-risk-aversion-battle-when-will-the-inflation-battle-start-2/

George Dorgan auf Finews: Die vier Fronten bei der Goldinitiative

Der frühere UBS-Banker und Ökonom George Dorgan sieht in der Debatte um die Goldinitiative vier Fronten aufeinander prallen. Dabei wird die Abstimmung über das Schweizer Gold immer mehr zu einem Entscheid über den Fortbestand oder die Abschaffung des Euro-Mindestkurses.

Permanent link to this article: http://snbchf.com/gold/george-dorgan-auf-finews-die-vier-fronten-bei-der-goldinitiative/

Keith Weiner: SNB Must Keep Euro over 1.20 To Avoid Losses of Swiss Banks

The recognized Austrian economist Keith Weiner and the Wall Street Journal argue that the SNB must keep the euro over 1.20 in order maintain stability in the Swiss banking system. A rapid appreciation of the franc would create losses on the balance sheet of Swiss banks.

Permanent link to this article: http://snbchf.com/snb/euro-1-20-losses-swiss-banks/

Swiss Franc and Swiss Economy: The Overview Questions

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Permanent link to this article: http://snbchf.com/chf/chf-appreciation-swiss-economy/

SNB Results Q2/2014: Draghi’s Weak Euro Policy, a Nice Gift for the SNB, for Now

The ECB commitment to a weak euro and the maintenance of ultra-low interest rates, was a nice (temporary) gift for the Swiss National Bank (SNB). The bank earned nearly 12 billion francs in Q2/2014.

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Permanent link to this article: http://snbchf.com/2014/07/weak-euro-nice-gift-for-snb/

Swiss National Bank: Composition of Reserves and Balance Sheet History

We regularly publish the SNB asset structure by currency, rating & duration. They shall be a template for the tactical asset allocation along these dimensions for other conservative asset managers – CHF holdings certainly excluded because the SNB nearly exclusively buys foreign assets.

Permanent link to this article: http://snbchf.com/snb/composition-reserves/

SNB First Quarter Results: 1.7% annualized Yield on Seigniorage, 2% annualized Loss on FX Rate Change

The main task of a central bank occupied with QEE (quantitative easing or exchange intervention) is to obtain higher gains on seigniorage than it loses with its “ever appreciating” currency. Otherwise its equity capital would be absorbed. In the first quarter of 2014, the Swiss National Bank (SNB) was unable to accomplish this task.  

Permanent link to this article: http://snbchf.com/2014/05/snb-first-quarter-results-1-7-annualized-yield-seigniorage-2-annualized-loss-fx-rate-change/

Is the SNB Intervening Again?

Update March 21, 2014: Total SNB sight deposits increased to 367.8 bln. CHF, but flows reverted a bit. Foreign banks and “non-banks” reduced their CHF exposure at the SNB to 50.8 bln, possibly converting a part of the difference into USD. Dollars are more useful when sanctions will hurt both Russian and German firms. On …

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Permanent link to this article: http://snbchf.com/2014/03/snb-intervening-again/

2013 SNB’s Valuation Gains 14 billion CHF on Stocks, but Losses of 35 bln. on Gold, FX and Bonds

The Swiss National Bank (SNB) is reporting a loss of CHF 9.1 billion for the year 2013 (2012: profit of CHF 6.0 billion). Valuation losses on gold holdings amounting to some CHF 15.2 billion contrast with a profit of CHF 3.1 billion on foreign currency positions and a net result of CHF 3.4 billion from …

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Permanent link to this article: http://snbchf.com/2014/03/2013-snb-valuation-gains-14-billion-chf-stocks-losses-35-bln-gold-fx-bonds/

SNB Q1/2014 Results: 1.7% annualized Yield on Seigniorage, 2% annualized Loss on FX Rate Change

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Permanent link to this article: http://snbchf.com/snb/2014-q1-results-seignoriage/

15 Billion SNB Losses on Gold in 2013, But 40 Billion SNB Profit on Gold between 2000 and 2012

Permanent link to this article: http://snbchf.com/snb/snb-profit-gold-results/

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