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Swiss National Bank Loses Money Because It Is Not Entirely Invested In Swiss Currency

Apple stock’s got nothing on the franc.
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Deborah Cordwell [CC BY 3.0], via Wikimedia Commons

Deborah Cordwell [CC BY 3.0], via Wikimedia Commons

In spite of the Swiss’ best efforts, people simply refuse to acknowledge how fucking shitty and overvalued is the Swiss franc. This is especially true in times of uncertainty, such as, for instance, when the leader of the free world is an unhinged madman who has shut down the American government and launched trade wars with its largest trading partners and has suggested that maybe the American dollar isn’t so freakin’ great. And it has rather dire consequences for the Swiss themselves, making their native pizza an unaffordable luxury and making their central bank lose oodles of money. Again.

The Swiss National Bank swung to a 15 billion franc loss in 2018, as a double whammy of weaker global equity markets and a stronger Swiss franc eroded the value of its massive holdings of foreign stocks and bonds….

After years of currency interventions by the SNB—creating francs to purchase foreign stocks and bonds in a bid to weaken the franc—the bank has amassed over 700 billion francs worth of foreign assets, an amount that exceeds the country’s entire gross domestic product…. This included over $3.5 billion in Apple Inc. shares at the end of the third quarter, according to Securities and Exchange Commission filings, $2.6 billion in Amazon Inc. stock and $2.7 billion in Microsoft Corp.

On the bright side, Thomas Jordan & co. are still sitting on last year’s pretty sweet 54 billion franc profit, and are also Swiss bankers, so we’re pretty sure the world’s oldest democracy is gonna be OK until it elects its very own Donald Trump/Jair Bolsonaro/Viktor Orban/Andrzej Duda/Boris Johnson/Marine Le Pen type.

Riches to Rags: Swiss Central Bank Swings from Record Profit to Large Loss [WSJ]


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