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In Unprecedented Intervention, Swiss Central Bank Bails Out Firm That Prints Swiss Banknotes

 

In the most ironic story of the day, the company that makes the paper that Swiss banknotes are printed on was just bailed out by the money-printing, stock-purchasing, plunge-protecting, savior-of-global equities…Swiss National Bank.

Swiss National Bank

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While The SNB has a long and checkered history of buying shares in companies… as we have detailed numerous times, it is no stranger to pumping money into companies all over the world…

SNB - US Stock Holdings, Q3 2017

(see more posts on SNB Holdings, )
SNB - US Stock Holdings, Q3 2017

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Including Apple, Alphabet, and Microsoft…

But, as Reuters reports, this is its first acquisition in decades.

The central bank said on Thursday it was purchasing a 90 percent stake in Landqart AG after the company – which makes the polymer material used in new 10-franc notes – got into financial difficulties.

SNB Top Holdings, Q3 2017

(see more posts on SNB Holdings, )
SNB Top Holdings, Q3 2017

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The Swiss National Bank certainly has the ‘currency’ to do the bailout – its share price is up over 250% in the last 2 years…

 

Buying the company was the best solution to avoid interruptions in the production of the Durasafe paper, described by SNB Chairman Thomas Jordan as “integral” to the safety of new notes.

“In case the Swiss National Bank was not ready to .. buy the company we would have had the risk of liquidation of the company, that would have been orderly or less orderly,” Jordan told a press conference.

 

“The risk would have been an interruption of the production of Durasafe which (would) be very problematic for our bank note issuance that takes place at this moment.”

The deal came about after an overseas customer unexpectedly cancelled an order with Landqart, which employs 260 people, leading to a big drop in sales and cash flow problems. The company reduced workers’ hours to deal with the crisis, which the SNB said posed a “direct and existential threat” to Landqart’s survival.

The SNB said Landqart would be provided with enough funds to ensure its survival, with between 5 and 15 million francs earmarked for the project.

“As long as the public wants to have bank notes, we will provide them with bank notes,” he said.

 

“As long as this is the case we have the ambition to provide state of the art and very safe bank notes.”

Does anyone else see the irony that in a world that is ‘printing money’ at the fastest rate in its history, one of the biggest manipulators of markets via its balance sheet is forced to bail out it money-manufacturer…

SNB Overview, 2013 - 2017

SNB Overview, 2013 - 2017

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Full story here
Tyler Durden
ZeroHedges' Tyler Durden is the hero of Fight Club, the 1999 movie based on Chuck Palahniuk's novel that reflected Chuck's experience in the Cacophony Society Quote: "Goddamn it, an entire generation pumping gas, waiting tables, slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off." --> see more about Tyler on snbchf
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