Gold and UBS bolster central bank books
Switzerland’s central bank has made a profit of SFr1.5 billion ($1.35 billion) for the first quarter of 2010 compared with SFr4.8 billion for the same time last year.
The Swiss National Bank (SNB) said on Friday that SFr921 million in profit had come in the wake of using funds to siphon off toxic assets from big bank UBS, which needed a bailout last year after taking huge losses in the subprime mortgage crisis.
But large purchases of euros to suppress the value of the franc weighed on the central bank’s figures. Debt worries have pushed the common European currency to record lows, contributing to a SFr3 billion loss on the SNB’s currency reserves.
The SNB saw its euro stocks increase from €37 billion to €56.4 billion in the first quarter alone, prompting an increased risk of inflation. The bank said the euro has dropped 3.8 per cent below its level three months earlier.
Gold prices helped pad the report. The bank’s vaults now hold gold stocks worth SFr1.3 billion more, although that is down SFr2.77 billion from the same period last year.
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