1/6
SNB President Thomas Jordan has suffered a record loss.
Sarah FrattaroliDeputy Head of Economics
The deep red stock market year cost some investors a lot of money – but probably none of them made as much loss as the Swiss National Bank (SNB): 132 billion francs, according to provisional calculations by the National Bank.
SNB President Thomas Jordan (59) has to record a historic loss. Blick answers the most important questions about the huge minus.
How did the billion-dollar SNB loss come about?
The SNB holds a huge mountain of foreign currencies, most recently worth CHF 800 billion. If the Swiss franc appreciates against foreign currencies, this mountain of foreign currency loses value – and the SNB incurs a loss. In 2022, the weakening euro in particular was fatal to the SNB.
In addition to exchange rates, the capital markets also influence the SNB result. Because stock markets worldwide plummeted last year, SNB investments also went downhill.
Last but not least, the price of gold has a decisive influence on the SNB result. After all, things were going well for the National Bank here: its gold holdings are worth CHF 0.4 billion more than a year ago.
What does the record loss mean for the federal government and the cantons?
You will not receive a payout. The SNB distributes up to six billion francs a year, two-thirds of it to the Confederation and one-third to the cantons. These six billion are now missing. Although this had become apparent, many cantons and the federal government had budgeted at least part of the money. The canton of Bern, for example, had expected CHF 320 million from the SNB. This money is missing and could bring the canton a deep red result instead of a black zero.
Most recently, in 2013, the Confederation and the cantons had to forego the SNB distribution. It is particularly bitter that the Confederation and the cantons have to forego SNB funds now of all times, when the economic prospects are no longer so rosy. The fear of recession is spreading, it is unlikely that tax revenues will flow extraordinarily right now and plug the SNB hole.
What does the loss mean for me personally?
The loss has no direct impact. Indirectly, however, the deep red result can be noticeable. In the canton of Bern, for example, tax cuts planned for 2024 for natural and legal persons could be in jeopardy if the SNB does not receive millions. In addition, the cantonal government is encouraging its officials to take a critical look at spending in the current year. Other cantons are likely to act similarly in order not to slide into the red due to the lack of SNB funds.
Can the SNB go bankrupt if it keeps making losses?
no “The loss doesn’t have to worry you at all,” emphasizes monetary policy expert Fabio Canetg (34). He even thinks it’s right that the SNB isn’t even trying to make profits: “It’s their job to keep inflation low. She did that.” The annual increase in 2022 was 2.8 percent in Switzerland – and thus significantly lower than abroad.
In addition, the SNB still has around 65 billion francs in equity even after its record loss. “You could even have negative equity for years,” explains Canetg. “That would not affect their ability to act.”
However, if a central bank’s equity is in the red for a long time, it damages its reputation on the markets. The SNB will do its best to avoid this.
Will the SNB make profits again in the new year?
Forecasts are difficult because the development of the stock markets, the price of gold and the Swiss franc have a major impact. In any case, it is unlikely that the federal government and cantons will be able to expect the maximum distribution again in a year. To do this, the SNB would first have to replenish its distribution reserve.