Swiss National Bank Reports the Loss of 132.5 billion Swiss francs in 2022

The Swiss National Bank (SNB) officially announced its annual figures for 2022 on Monday, with an annual loss of 132.5 billion Swiss francs ($141.54 billion), in line with its provisional calculations announced in January, breaking its biggest loss record in 115- year history.

The loss means that for the second time since the bank was founded in 1907, it has not made payments to central or regional governments or paid dividends to investors.

The main reason for the loss was the plunge in the value of the bank's investments caused by the fall in bond and stock markets. The bulk of the losses can be attributed to a loss of 131.5 billion Swiss francs in foreign exchange positions, which reduced the value of the bank's bond holdings by 72 billion Swiss francs and the value of its equity portfolio by 41 billion Swiss francs.

The strength of the Swiss franc also had a negative impact, reducing the Swiss National Bank's holdings and earnings when foreign investments were converted into Swiss francs.

But it seems that some analysts think the loss will not affect monetary policy. UBS economist Alessandro Bee believes "this wouldn’t change monetary policy in the short term." He said: "Only in the case of a prolonged period of negative equity I would see an impact on monetary policy. But we're far from such a scenario even after the huge loss of last year."

Karsten Juniu, an economist at J.Safra Sarasin also said, "The SNB's colossal losses will not change its monetary policy at all, the high reputation of the SNB helps that it doesn't have to change anything."

The Swiss National Bank will update its monetary policy on March 23.

Source: Reuters