SNB lost $143 billion last year

On January 9, the Swiss National Bank stated that due to the impact of stock and bond exchange, it is expected to lose 132 billion Swiss francs (about 143 billion U.S. dollars, about 971.8 billion yuan) in 2022, the largest loss in 115 years. According to the media, the Swiss central bank has always been actively investing in stocks and bonds. The Swiss central bank stated that about 131 billion Swiss francs of its losses in 2022 will come from the foreign exchange market. The analysis pointed out that it purchased more than 800 billion Swiss francs of stocks and bonds for shorting the Swiss franc. However, due to the relatively strong performance of the Swiss franc, it rose above parity against the euro in July, resulting in losses for the Swiss National Bank in the foreign exchange market. | Related Reading (Wall Street Insights)

Cong Xiang

The reason why the Swiss National Bank suffered such a severe loss this time is to briefly summarize the reason: Shorting the Swiss franc resulted in a huge loss of US$143 billion. But of late, the SNB, while perhaps one of the biggest losers, is not the only one. As central banks around the world scramble to raise interest rates sharply in response to soaring inflation and unwind massive bond-buying programs, many are set to post huge losses because they now have to pay commercial banks more than they earn elsewhere , while central banks in the Czech Republic, Sweden, Chile, Israel and Mexico have posted losses as rate hikes continue. This may turn into a common phenomenon.

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