Foreign banks in Switzerland probably will be more affected than the country’s own lenders by the central bank’s decision Thursday to charge interest on deposits.
The Swiss National Bank said it will charge 0.25 percent on some deposit account balances in excess of 20 times the minimum reserve requirements, a threshold foreign-owned banks exceed by a larger margin, data from UBS Group AG economists shows.
Uncertainty in the financial markets and the worsening of the crisis in Russia have “substantially increased demand for safe investments,” SNB President Thomas Jordan said Thursday.
Swiss officials acted as the turmoil in Russia, along with the imminent prospect of quantitative easing from the European Central Bank, kept the franc too close to its 1.20 per euro ceiling.
“Negative rates are mostly aimed at the foreign banks that choose to hold their money in Swiss francs because they think it’s safer at the moment,” Dirk Becker, a Frankfurt-based analyst at Kepler Cheuvreux said. “The SNB is trying to discourage that.”
