Category Archive: 1) SNB and CHF

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The two phases of CHF appreciation… and what is in between

We show the two phases or "two innings" of Swiss franc appreciation: The risk aversion phase and the high inflation phase. With the weakening of emerging markets and the strengthening of the United States in 2013/2014, the Swiss National Bank (SNB) had won the first battle in the war against financial market, the "risk aversion game", the first inning in two-part match. Risk aversion is lower because the United States recovered with weaker oil...

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The History of the Swiss Franc

In this post we will show the history of the Swiss Franc until 1971, a monetary era driven by the gold standard and the Bretton Woods period, both periods with nearly fixed exchange rates.

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Ex-Post FX Evaluation: Is the Swiss Capital Account Able to Neutralise the Persistent Current Account Surpluses?

Net International Investment Position in % of GDP Switzerland United States

(post written originally in March 2013) We reckon that the Swiss National Bank (SNB) will have issues maintaining the EUR/CHF floor in the longer term, because the expected yields on Swiss investments abroad will not be sufficiently higher than the yield on investments in Switzerland. Because of this insufficient risk-reward relationship, outflows in the capital account of the Swiss balance of payments will not cover the persistent Swiss current...

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einhorn

2015-05-04

by Tyler Durden

Einhorn

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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...

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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.

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2) CHF

This IMF data on the SNB website shows SNB Forex and gold reserves in the last month. It is so-called "IMF Special Data Dissemination Standard (SNB Data)"

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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.

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Das Ende der Schweizer Sozialbürokratie dank bedingungslosem Grundeinkommen (BGE)

The best posts by Marc Meyer, the biggest and most influential enemy of the Swiss National Bank. He regularly published in German on InsideParadeplatz.ch

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Is the Swiss Franc Really so Expensive or is Swiss Consumption anemic?

global imbalances contributors historically

One of the most predictable consequences of the Swiss National Bank’s decision to stop suppressing the exchange rate between the franc and the euro was the whinging of Swiss exporters. That doesn’t mean the policy change was an error. If anything, it may help rebalance the Swiss economy away from its excessive dependence on exports towards greater levels of domestic consumption.

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End of EUR/CHF Peg

Selected essays on the end of the EUR/CHF peg

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Werden Bund und Kantone die Nationalbank rekapitalisieren?

Marc Meyer speaks out against the view of Barry Eichengreen and Beatrice Weder di Mauro that published an article in Project Syndicate. The two professors were of the opinion that the SNB could print without limit. Meyer does not agree.

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George Dorgan’s questions to Swiss National Bank, Date December 11, 2014

2015-02-17

by George Dorgan

Colin Llyod gives a detailed explanation of the end of the EUR/CHF peg on Seeking Alpha. Most extracts come from George Dorgan, on snbchf.com

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Why did the Swiss franc spike? Lack of Capital Outflows

There is a straightforward answer to the question in the headline: more money has been trying to get into Switzerland than get out, which didn’t affect the exchange rate as long as the Swiss National Bank bought foreign currency. As soon as they stop...

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End of Peg Buiter Critique

2015-01-25

by Dirk Niepelt

2015-01-25

In a Citi research note, Willem Buiter discusses the SNB’s decision to discontinue the exchange rate floor of the Swiss Franc vis-a-vis the Euro. His main points are: Buiter refers to his earlier work on removing the lower bound on nominal interest r...

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CHF Is No Safe-Haven, but a Safe Proxy for Global Economic Growth

In our view the Swiss franc is not a pure Safe-Haven, but a "Safe Proxy for Global Economic Growth". Global investors want to participate via the purchase of safe Swiss multi-nationals in global growth. This means inflows into Swiss franc denominated assets. Together with the big Swiss trade surplus, this implies a stronger franc. China stands for global economy, its slowing growth has a negative influence on the profits of Swiss multi-nationals...

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