Friday, March 24, 2023

No money for cantons – economists criticize SNB

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After losing billions

No money for cantons – economists criticize SNB

The economists at the SNB Observatory take a critical view of the Swiss National Bank’s (SNB) decision not to make a distribution to the federal government and the cantons because of the massive annual loss. They describe the procedure for distributing profits as “incomprehensible”.

The SNB leadership around President Thomas Jordan is under criticism because of this year’s payout waiver. In the course of the massive annual loss, the SNB waived a distribution to the federal government and the cantons. (Archive picture)

According to estimates by the group of economists, the equity of the SNB may have shrunk from around CHF 200 billion to CHF 66 billion. Even the distribution of the maximum amount of 6 billion would make “no significant difference”. Behind the “SNB Observatory” are the Basel economics professor Yvan Lengwiler, the Geneva professor emeritus Charles Wyplosz and the EFG chief economist and former central banker Stefan Gerlach.

In addition, the SNB is not using its provisions for foreign investments of almost 96 billion at the end of 2021 to absorb its foreign currency loss of 132 billion. The decision raises the question of the purpose of these provisions, the report says. Despite the loss, the SNB had announced that it would increase the provisions for currency reserves by 9.6 billion: “This policy lacks any economic and financial logic,” it says.

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