Swiss bank with giant loss
The Swiss central bank has posted a nearly $143 billion loss after nine months of this year.
The Swiss central bank’s gigantic loss is the result of interest rate hikes, a strong franc and cheapening stocks, bonds and gold. After nine months, it was as high as $143 billion, the largest in the bank’s 115-year history. Despite this, the institution is not in danger of bankruptcy. Alessandro Bee, an economist at UBS, comments that in the case of the Swiss central bank, normal bankruptcy rules do not apply. It will remain liquid as long as there is demand for Swiss francs. However, due to large losses, the bank will suspend payments to the Swiss federal and cantonal governments next year. The bank’s vice president commented that negative capitals will not change its approach. He assured that the bank can still carry out its tasks.
