Minus CHF 95 billion: In the first half of 2022, the Swiss National Bank SNB recorded a record loss. This was due to price losses on bonds and shares as well as the strong Swiss franc. Because the euro depreciated against the Swiss franc, the value of the SNB’s foreign exchange investments also fell.
Since the big loss, there has been speculation as to whether the SNB’s distributions to the Confederation and the cantons are at risk. If the financial markets don’t calm down, that’s actually possible, says SNB Governing Board member Andréa Maechler in “Eco Talk” with Reto Lipp.
SRF News: Ms. Maechler, can we already say that the cantons and the federal government cannot expect any money from the National Bank this year?
Andréa Maechler: It is not possible to say until December 31 what profits we will report on our balance sheet. However, it could be difficult for a payout if the financial world does not change significantly.
Should the franc generally become too strong, then we would be prepared to intervene – that is, to buy foreign exchange.
However, our performance must not be assessed on the basis of profits or losses in the balance sheet. That would be absolutely wrong. But what we are doing – and we have done very well in recent years – is making sure that we even out the gains for the Confederation and the cantons as much as possible over time.
The SNB has around CHF 900 billion in foreign exchange reserves. Can she ever part with her euros?
At the moment, reducing the balance sheet would not be appropriate, that is quite clear. We conduct our monetary policy by raising interest rates, because this allows us to send a clear signal as to where we want to go and how we can also manage inflation expectations over the long term. The balance sheet remains an important tool. Should the franc generally become too strong, then we would be prepared to intervene – that is, to buy foreign exchange. If the franc suddenly became too weak, we would be ready too.
One euro was now worth 94 centimes. Where is the pain threshold for Swiss industry?
This is an important and also complex point. One should never look at the exchange rate in nominal terms and not only against a single currency like the euro or the dollar. The inflation-adjusted, real exchange rate is important for companies.
If prices abroad rise sharply, the franc can appreciate without an immediate loss of competition. This means that if inflation in Switzerland is lower than abroad, the Swiss franc can appreciate a little.
The Swiss franc has appreciated in recent months. That’s also intentional, because it helped us dampen imported inflation.
The SNB can dampen inflation in Switzerland by allowing the Swiss franc to appreciate. At the same time, however, the SNB’s losses will increase if the euro loses value against the Swiss franc. Doesn’t the SNB have a conflict of goals here?
We must not have a conflict of goals, and neither do we. It is important for us that we use our reserves, our balance sheet, correctly as a monetary policy instrument. You are right, the Swiss franc has appreciated in recent months. That’s also intentional, because it helped us dampen imported inflation.
More on the subject tonight at 10:25 p.m. on SRF1 in “ECO Talk”.