More Swiss banking news:
- Swiss National Bank and Finma supervisory body will work more closely
- UBS says IRS has eyes on 20 Swiss banks
Zurich, Switzerland (GenevaLunch) - Swiss bank UBS has told Swiss German newspaper Tages-Anzeiger that it sent letters to several Swiss politicians early in the week to encourage them to approve an agreement between Bern and Washington, DC that now goes to parliament for a vote.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank ended 2009 with a profit of CHF10 billion, in line with estimates published 21 January. The bank attributes the turn-around from a CHF4.7b loss in 2008 to “substantial valuation gains amounting to CHF 7.3 billion on gold holdings and interest income on foreign currency positions.” The SNB financial results are published as part of consolidated statements that include the annual financial statements of the parent company and the UBS stabilization fund. “Taking into account the UBS equity contribution, the stabilisation fund showed a loss of approximately $400 million at 31 December 2009. This was fully covered by the SNB option for 100 million UBS shares at nominal value.”
Bern, Switzerland (GenevaLunch) - The finance commission of the Swiss Parliament’s lower house agreed Thursday 21 January to set up a special investigative commission to review decisions made by Swiss authorities concerning UBS. The new commission will review decisions made by the Swiss Federal Council, the Swiss National Bank and Finma, the financial system supervisory body, in three areas: the UBS bailout in the contect of the financial markets crisis, changes to supervisory regulations covering UBS and the decision by Finma for UBS to release client data to US tax authorities.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank expects to see a “large profit” of CHF10 billion for 2009, thanks to the rapid rise in the price of gold and currency fluctuations during the year. The valuation of the gold holdings of the central bank rose by CHF7.3 billion during the year, with the price of gold moving between about $800 and $1,200 an ounce (chart).
The bank’s foreign currency positions brought in another CHF2b.
The profits are shared in part with the federal and cantonal governments, some CHF2.5b.
Zurich, Switzerland (GenevLunch) – Interest rates will stay low, continuing the policy of monetary expansion, Switzerland’s central bank announced 10 December. The Swiss National Bank argues that the economic recovery is still too fragile to warrant a rise in interest rates which will remain in a range of 0-0.75 percent for the three-month Libor. The bank says it will keep rates at the lower end of this band, and will intervene decisively to maintain the Swiss franc stable against the Euro.
It also announced it was suspending its purchases of Swiss franc bonds issued by private sector companies, a measure introduced to provide the market with liquidity.
Philipp Hildebrand, SNB
Geneva, Switzerland (GenevaLunch) – The incoming head of the Swiss National Bank, Philipp Hildebrand, says Switzerland needs tighter banking regulations than most countries, due to its size relative to the country’s economy. Total banking assets exceed seven times Switzerland’s GDP, he notes, and they are very concentrated, with the two big banks, Credit Suisse and UBS, having two-thirds of the total.
Recovery may be underway but the costs to the global economy, longer term, loom large. “The potential costs of the support measures taken – capital injection, asset purchases, and guarantees of bank debt – in the G7 countries together with Australia, the Netherlands, Spain and Switzerland amount to about 20 percent of GDP in these economies,” he says, although actual outlays have been about 8 percent.
Hildebrand, who takes over as SNB chairman in January 2010 when Jean-Pierre Roth retires, made his remarks in a speech Wednesday evening 18 November at the University of Geneva.
The SNB is focusing on two areas of bank regulation changes, in line with recommendations drawn up by the Financial Stability Board (FSB) The FSB was created in April 2009 and is housed at the Bank for International Settlements in Basel, Switzerland.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank (SNB) had cumulative profits for 2009 of CHF6.9 billion at the end of September 2009 thanks to the continuing high price of gold, improvements in financial markets and low interest rates that resulted in valuation gains in both gold and foreign currency investments. Gold accounted for CHF3.8 billion: the price of gold was at CHF33,304 at the end of the third quarter, compared to CHF29,640 per kilo at year-end 2008.
Zurich, Switzerland (GenevaLunch) - Mortgage loans in Switzerland, 40 percent of which are new construction loans, rose by 4.6 percent in July. They had been falling but began to rise after Swiss interest rates moved lower starting in November 2008, says the Swiss National Bank (SNB). Mortgage loans constitute 80 percent of all loans.
Loans other than mortgage loans fell by 1.6 percent in July, however.
We're all connected: Swiss economic health depends on the world, says SNB
Zurich, Switzerland (GenevaLUnch) - The Swiss National Bank’s (SNB) is guardedly more optimistic than in June about the outlook for the Swiss economy, it said Thursday afternoon 17 September in its quarterly report, but monetary policy will remain loose in order to stimulate the economy. The central bank revised its GDP (gross domestic product) forecast, saying it expects this to fall by between 1.5 and 2 percent, less steeply than forecast in June (2.5 to 3 percent). The key interest rate range remains unchanged at 0.0-0.75, “still aiming to keep the Libor within the lower end of this range, that is, at approximately 0.25%.” The Libor serves as an indicator of shifts in bank lending rates.
The SNB says it will continue to intervene in currency markets to keep the Swiss franc competitive internationally.
Update 2 0:30 Update 1 20 August 0:08 Bern, Switzerland (GenevaLunch) – The Swiss government is selling 332.2 million shares in bank UBS, withdrawing “immediately and entirely” its stake in the bank. The announcement was made by Bern after details were published Wednesday 19 August of the Swiss-US out of court settlement in the UBS bank case.
(correction: price of gold) Zurich, Switzerland (GenevaLunch) – The Swiss National Bank has posted a positive half-year result of CHF5 billion before provisions, compared to a loss of CHF3.4b a year earlier. The SNB ended 2008 with a loss of CHF4.3b. The central bank’s legal obligations require it to set aside provisions that allow it to maintain currency reserves at a level necessary for monetary policy. For the first six months, CHF701.8 million will be allocated to provisions. The stabilization fund set up to bail out bank UBS had no impact on the results, the SNB points out.
Swiss trade surplus grew, investment income fell
Zurich, Switzerland (GenevaLunch) - Switzerland’s net investment earnings are negative for the first time since the Swiss National Bank (SNB) began compiling statistics in 1947, ironically, as a record trade surplus was posted for 2008. Losses from Swiss banks’ foreign subsidiaries caused 2008 income from direct investment abroad to fall sharply, from CHF60 to 8 billion. Meanwhile, the trade surplus for 2008 widened by CHF5b to CHF19b, as exports grew and imports fell. The impact of the global economic crisis affected trade figures only in the fourth quarter, after three quarters of strong growth.
Net investment earnings show the earnings from Swiss investments abroad, minus payments to foreigners on their investments in Switzerland. This is historically a large surplus because of the earnings of Swiss multinationals, including banks. Their earnings have been declining, but the bailout solutions for bank UBS meant yet more money flowed out of Switzerland.
Bern, Switzerland (GenevaLunch) – The Swiss central bank (SNB) will maintain the monetary policy it introduced in March, it announced today 18 June. Its predictions for the Swiss economy continue to be guardedly pessimistic, because of the negative effects the world economy has on Switzerland. The one positive note has been the decline in the prices of commodities, such as oil, but this has contributed to deflation. Swiss prices will decline by 0.5 percent in 2009, says the Swiss state secretariat for economic affairs (SECO) in its report yesterday 17 June.
Updated 13:45 Zurich, Switzerland (GenevaLunch) – The Swiss National Bank has posted a first quarter profit of CHF4.83 billion, thanks in large part to the increase in the price of gold and the movement of exchange rates. The stabilization fund to help bail out UBS had a negative impact of CHF483 million. The balance sheet for the central bank increased by CHF22 bn.
P Pardeshi, right
Founex, Vaud, Switzerland (GenevaLunch) – La Chataigneraie (International School of Geneva) final year student Pratyancha Pardeshi is one of six students to win a top award and CHF500 prize for an economics essay she submitted to the Swiss National Bank’s economics teaching programme, iconomix. Her paper, “How can government intervention be used to correct the market failure occurring in Bhimashankar Wildlife Sanctuary?” was written as part of the International Baccalaureate diploma programme’s “extended essay” requirement.
Iconomix gold winners 2009
Philipp Hildebrand
Thomas Jordan
Zurich, Switzerland (GenevaLunch) – Philipp Hildrebrand, age 46, 8 April was named chairman of the Governing Board of the Swiss National Bank (SNB), effective 2010, taking charge at that point of the SNB’s Department I, with responsibility for economic affairs, international affairs, legal and property services, and support functions. He will take over from Jean-Pierre Roth, who retires at the end of 2009. Thomas Jordan, also 46, was named vice-chairman. A new member of the Board has been named: Jean-Pierre Danthine, from Vaud, who heads the Swiss Finance Institute.
Zurich, Switzerland (GenevaLunch) - Jean-Pierre Roth, who has been chairman of the Governing Board of the Swiss National Bank since January 2001, has announced his retirement at the end of 2009. He joined the SNB nearly 30 years ago, and he has been a member of its Governing Board since May 1996.
Zurich, Switzerland (GenevaLunch) – UBS will get $35 billion in help from the Swiss National Bank (SNB) through the stabilization fund (SNB StabFund) established in October 2008 rather than the $60 b figure given at the time. The SNB refers to greater financial stability in its Tuesday 10 February press release, “Developments since then have shown that, from a financial stability perspective, certain financial instruments will not need to be transferred to the fund.” The total amount in the StabFund will be $39.1 b, with UBS responsible for the cost of transferring 10% of the assets into the fund.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank (SNB) has released details of its bailout package fund for ailing UBS, which will be registered in Bern, and not in the Cayman Islands as originally suggested.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank Thursday early afternoon lowered its three-month Libor target range to 0.5-1.5%, effective immediately, to increase money market liquidity. The bank noted that with lower costs for oil and raw materials, prices should come under control sooner than earlier predicted, and the central bank now expects inflation to fall below 2% before the end of the year.
Zurich, Switzerland (GenevaLunch) – The Swiss National Bank (SNB) early Thursday afternoon lowered its key interest rate range to 1.5-2.5%, effective immediately, saying it intends “to hold the rate in the middle of the target range for the time being.”
