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SNB Balance Sheet Now Over 100 percent GDP

Since 2008 the balance sheet of the Swiss National Bank has risen from 28% to 102% of Swiss GDP. Balance sheets of other central banks have strongly risen, too. But there is one big difference: The risk for the SNB is far higher, the SNB nearly exclusively possesses assets denominated in volatile foreign currency.

SNB balance sheet now over 100% of GDP

It should be remarked that the SNB assets are volatile FX investments.

FX investments are less than 3% of the BoJ, ECB, Fed and BoE balance sheet.

Central banks from Emerging Markets typically buy foreign bonds. But these countries have far higher inflation and therefore – over time – a weaker local  currency.

But the Swiss Franc is a currency that by tendency appreciates.

SNB Balance Sheet 2016

SNB runs a massive currency risk 

SNB: From 40% in 2012 to 102% of GDP. Nearly all volatile assets in foreign currency.

Bank of Japan: Still increasing asset purchases. Only 2% of assets in foreign currency. The Japanese private sector owns foreign currency bonds, but not the central bank.

ECB: Since Mid 2014, rising asset purchases. Has few foreign assets.

Fed: Stopped asset purchases in 2015.

Bank of England: % of GDP remained flat since 2013. The BoE no assets in foreign currency.

People’s Bank of China

Stopped strong asset purchases in 2011.  Has a high currency risk because the assets are mostly in US Dollar and some Euro. However China is a country in development, with typically higher inflation rates. This reduces the currency risk.



Central Bank Balance Sheet as percentage GDP

(see more posts on SNB balance sheet, on Central Bank Balance Sheets)

Balance Sheet in percent GDP

Source American Inflation Association



Total Assets of Major Central Banks

The Fed, ECB, BoJ and BoE bought assets in their own currency, while the PBoC bought mostly dollars in order to prevent a stronger appreciation of the yuan.


Balance Sheet Fed BoJ SNB ECB BoE

Western Central Banks Still Increasing Liquidity

“But, for now, a rash of global Central Banks continue to support asset prices by increasing accommodative policies either through additional reductions in interest rates or direct injections of liquidity. As Matt King from Citi recently noted:

‘It has been a surge in net global central bank asset purchases to their highest level since 2013.’


Weekend Reading: Yellen Is Paralyzed On The Zero Bound



The SNB buy foreign assets
while the BOJ does not

whereas the Japanese possess only 3% foreign assets, see more details.

SNB vs. BoJ Balance Sheet

SNB vs. BoJ Balance Sheet



George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
See more for 1.) SNB, George Dorgan's opinion

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1 comment

  1. Stefan Wiesendanger

    The warning should not be about the composition of SNB reserves because they are foreign-denominated by design. And the risk management on them with 20% global shares and for the rest a sizable chunk of German Bunds appears to me to be robust under many scenarios, including Euro-breakup and no Euro-breakup. Of course there will be losses if there is turmoil, but losses that can be met.

    The real warning should be about the rate of growth of reserves. The implicit crawling peg should be doing more crawling and less pegging. The problem is that the department Schneider-Ammann (and behind the scenes Swissmem) has hijacked the discourse in the current Bundesrat and created an atmosphere of panic. Just look at the CVs of the current office-holders. Other than Schneider-Ammann, there are a pianist, two lawyers, a politician and two farmers. None of them have the slightest clue about monetary matters, and other than Schneider-Ammann, none of them have ever been exposed to the private economy. None of them can hold their ground let alone imagine a way forward.

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