Switzerland’s largest bank, UBS, asked 2,500 companies about the impact of negative interest rates. “Nearly two-thirds of respondents said that the cost…for the economy outweighed their benefits overall,” UBS said in a press releaseExternal link on Thursday.
The findings heap more pressure on the Swiss National Bank (SNB), which continues to defend its actions.However, companies are not particularly concerned about the effects of monetary policy on their own businesses. “Most companies are not directly affected by negative interest rates; only a minority pay negative interest rates on cash held in bank accounts.”
Moreover, ultra-low rates, which have been in place since 2015, help exporters by stopping the value of the franc from spiraling out of control and benefit firms taking out loans.
“What is remarkable, however, is that a majority of companies who generate over 50% of their business from exports believe that negative interest rates are harmful to the Swiss economy overall – especially because no end is in sight,” says UBS chief investment officer Daniel Kalt, a long-term critic of the SNB’s policy.
Banking woes
Concerns centre on the inability of pension and savings pots to grow from traditional interest-bearing investments. The Swiss property market is also in danger of over-heating as investors rush to put their money into bricks and mortar.
Speaking at a recent meeting of pension fund managers in Bern, SNB chairman Thomas Jordan defended the extraordinary monetary policy, arguing that the stabilisation of the franc is benefiting the economy as a whole. Jordan has also warned that interest rates may have to go even lower.
PostFinance confirmed on Thursday that it had reduced the threshold for charging negative interest from CHF500,000 to CHF250,000 on certain accounts.
Vincent Taupin, CEO of Edmond de Rothschild private bank, told the Financial TimesExternal link that the industry faces a crisis as profitable investment opportunities decline. “The good old times where . . . any kind of money you raised, you could put it at the central bank and make at least 400 basis points out of it, those are behind us,” he said.
Train vs plane: would you take a direct train between London and Geneva?
Eurostar is planning to run direct trains from Britain to Germany and Switzerland from the early 2030s. Would you favour the train over the plane? If not, why not?
Swiss watch industry calls for ‘clear solution’ with US
This content was published on
Federation of the Watch Industry calls for clear solution to tariff threat and a swift agreement between Bern and Washington.
Swiss youngsters illegally obtain alcohol in a quarter of test purchases
This content was published on
In a quarter of all alcohol test purchases last year, young people in Switzerland were able to obtain beer, wine or spirits illegally.
Swiss storm damage more frequent and more expensive
This content was published on
Storm damage has increased by 126% in the last ten years. Costs have risen by 133% in the same period, according to Helvetia Insurance.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Bank lobby group demands end to negative interest rates
This content was published on
SBAExternal link Chairman Herbert Scheidt said on Thursday that a normalisation of interest rates “appears a long way off”. “Unfortunately, the societal, structural and long-term damages will become even greater the longer we find ourselves in this ‘lower forever’ environment,” he told the media. Banks are suffering from having to pay for the privilege of…
SNB bows to pressure from banks for relief from negative rate
This content was published on
The SNB has offered banks some relief from negative interest rates, saying it would exempt more of their reserves from the cost of the policy.
Credit Suisse to charge wealthy clients negative interest rates
This content was published on
From November 15, corporate clients will be charged -0.85% interest on cash holdings above CHF10 million ($10 million), Credit Suisse confirmed on Friday. Individuals will face -0.75% rates on savings accounts above CHF2 million, starting from January 1, 2020. “In line with the approach that has long been followed by other banks, Credit Suisse is…
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.