Switzerland Today

Greetings from Zurich!

The Swiss people have again shown their generosity in response to a crisis elsewhere in the world.

The charity Swiss Solidarity has raised more than CHF1 million in public donations in the first 24 hours of an appeal to help the Turkish and Syrian victims of two huge earthquakes in Turkey.

Here is the other news of the day.

© Keystone / Michael Buholzer

In the news: disaster aid, a controversial song writer and soaring flights.

• Switzerland is among the countries responding to the plight of Turkey and Syria with the earthquake death toll mounting. Some 80 Swiss experts have arrived in Turkey and will work alongside specialists such as Redog and the charity Caritas.
• A popular Syrian singer, Wafeek Habib, has arranged a concert this month in Bülach, canton Zurich. But not everyone is pleased. Habib’s song lyrics lavish praise on Syrian President Bashar al-Assad. Some people told SRF that performances of such songs in Switzerland is unacceptable.
• In another sign that the coronavirus pandemic looks to have passed by, airline flights over Switzerland rose by two-thirds last year, according to air traffic controller Skyguide.
• Swiss financial legend Josef Ackermann has voiced concerns about a proposal to use frozen Russian oligarch funds to repair war damage in Ukraine. Ackermann, who once headed Deutsche Bank and the Zurich insurance group in addition to a board seat on Viktor Vekselberg’s Renova group, told SRF that such a move could damage the credibility of Switzerland’s wealth management industry.

© Keystone / Michael Buholzer

End of a shopping era

Zurich will lose another big-name retailer at the end of next year. The Jelmoli department store, which has stood in its prime location just off the prestigious Bahnhofstrasse since 1899, will shutter its doors.

The iconic brand has been accumulating millions in losses for the last seven years and was not helped by the pandemic.

Some 850 staff will lose their jobs when the business winds down for good. A store at Zurich airport and a warehouse in the canton will also be shut down.

The face of Swiss retail is changing as online shopping takes a larger slice of the market. In 2019, Manor closed down its Bahnhofstrasse flagship store and the following year announced job cuts.

In 2020, shoe retailer Vögele said it was closing down 60 of its 160 high street stores. And last month, health food chain Müllerwent into liquidation after more than 90 years of operations.

Putting nostalgia to one side, the capitulation of traditional brands in the face of new competition is nothing new.

And the recent retail retrenchment has not had much impact on the general Swiss job market. In fact, Switzerland recorded its lowest rate of unemployment for the month of January in 20 years.

© Keystone / Anthony Anex

Crunching the SNB’s grim numbers

How can a central bank lose CHF132 billion in one year? How can it survive with such a massive loss? And what does this mean for Swiss cantons?

My colleague Fabio Canetghas the answers.

The Swiss National Bank endured a torrid 2022, announcing a deficit that would bring down any commercial business.

As a result, the Confederation and cantons will have to make do without CHF6 billion in SNB handouts this year. And almost certainly not in 2024 either.

According to some economists, this leaves the central bank exposed to a wafer-thin equity ratio (assets minus debts) that is only a short step away from plunging into the red.

However, central banks have their own special rules of operation and at least one central bank in the world (Australia) currently has a negative equity ratio.

Fabio Canetg is well placed to answer all the questions that have been coming our way.