Swiss National Bank Loses over $52 Billion in First Half of 2015
- The central bank of Switzerland has been the biggest loser from its own actions undertaken on January 15th to scrap the floor under the EUR/CHF
The Swiss National Bank (SNB) published today its biggest ever loss for the first half of the year totaling CHF 50.1 billion ($52.2 billion). The event comes on the back of the Swiss central bank’s own decision to abandon the floor it maintained under the EUR/CHF Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate.
The bulk of the loss totaling CHF 47.2 billion ($49.3 billion) came from the appreciation of the Swiss franc, while CHF 3.2 billion ($3.3 billion) were attributed to the recent decline in gold prices.
The composition of the SNB’s balance sheet warrants a close correlation of the institution’s financial results to the price developments on a variety of markets, including foreign exchange, gold and capital markets in general.
Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards to the annual result. The loss on foreign currency positions by the SNB has greatly impacted its bottom line for the year after year of gains realized due to its persistent policy.
The loss is attributed to exchange rate-related losses on virtually all investment currencies. For the first half of 2015, these amounted to a total of CHF 52.2 billion.
Some components of the central bank’s balance sheet have performed solidly amid the relatively substantial negative interest rates which commercial banks have to pay to the SNB on their deposits at the central bank.
Interest income totaled CHF 3.5 billion ($3.6 billion) while dividend income contributed CHF 1.2 billion ($1.25 billion). The central bank registered a loss of CHF 3.9 billion ($4.1 billion) on interest-bearing paper and instruments as bond markets have remained volatile throughout the first half of 2015 and the expectations about the Federal Reserve moving on rates increased.
Consequently, the holdings of the SNB centered into Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term registered gains due to the substantial rally in a number of stock markets throughout the first five months of the year. This component added CHF 4.1 billion ($4.3 billion) to the net result of the SNB.
The Swiss National Bank (SNB) published today its biggest ever loss for the first half of the year totaling CHF 50.1 billion ($52.2 billion). The event comes on the back of the Swiss central bank’s own decision to abandon the floor it maintained under the EUR/CHF Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate.
The bulk of the loss totaling CHF 47.2 billion ($49.3 billion) came from the appreciation of the Swiss franc, while CHF 3.2 billion ($3.3 billion) were attributed to the recent decline in gold prices.
The composition of the SNB’s balance sheet warrants a close correlation of the institution’s financial results to the price developments on a variety of markets, including foreign exchange, gold and capital markets in general.
Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards to the annual result. The loss on foreign currency positions by the SNB has greatly impacted its bottom line for the year after year of gains realized due to its persistent policy.
The loss is attributed to exchange rate-related losses on virtually all investment currencies. For the first half of 2015, these amounted to a total of CHF 52.2 billion.
Some components of the central bank’s balance sheet have performed solidly amid the relatively substantial negative interest rates which commercial banks have to pay to the SNB on their deposits at the central bank.
Interest income totaled CHF 3.5 billion ($3.6 billion) while dividend income contributed CHF 1.2 billion ($1.25 billion). The central bank registered a loss of CHF 3.9 billion ($4.1 billion) on interest-bearing paper and instruments as bond markets have remained volatile throughout the first half of 2015 and the expectations about the Federal Reserve moving on rates increased.
Consequently, the holdings of the SNB centered into Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term registered gains due to the substantial rally in a number of stock markets throughout the first five months of the year. This component added CHF 4.1 billion ($4.3 billion) to the net result of the SNB.