I would have said Julius Baer or Vontobel instead of ZKB, but that wouldn't change the broad accuracy of your comment.

However, there's very much more to the Swiss economy than very dodgy money in off shore deposits.
If I were a pensive German voter (bit of a leap of faith, I know), I wouldn't be v happy at my govt having to pay the lion's share of a bailout of an off-shore financial economy based almost entirely on dodgy Russian money (that had sneaked into the EU via various loopholes).

... the same way I wouldn't be happy, I suppose, living in rented accommodation and working until 67 before I can start receiving pension payments whilst across the border my French colleagues retire on full state pesnions at 58 (and sell their property to Brits for hard Pounds), and my Italian colleagues sit on mountains of private wealth whilst their country is governed by clowns and my govt is expected to guaranty their public debt (130% of gdp).....

ah, the wonders of the Eurozone!

lest anyone think I sympathise totally wiz ze Tschermans, can I just remind people that Germany has probably benefitted more fromthe Euro than any other country, and probably stands the most to lose should it collapse.
If you doubt the latter ask yourself what countries would be able to afford German products if the country's currency reverted to the D-mark or even a so-called 'northern Euro?' Thanks to Helmut Kohl's (remember him?) not heeding his advisors but taking the plunge (and when he jumped into a pool, the backsplash was pretty big), Germany has to save the Euro to save itself

Mediobanca is Italy's second biggest bank
Mediobanca recent report said "Italy entered a "negative productivity spiral" only after it fixed the pre-EMU exchange rates in 1996. Refusing to acknowledge this "means denying the evidence". It accused the EU authorities of forcing the entire burden of post-crisis adjustment on the weaker Club Med states, of refusing to see the risk of a "negative recessionary spiral" in the South, or to see that these countries cannot stabilise their debt trajectories with a minimum of growth. The North must "meet the periphery halfway".
The report said the risk is a repetition of Argentina's fate as the dollar-peg fell apart in 2001. It cited the so-called "Frenkel Cycle" as it moves into its final seventh phase of "collapse", the brutal denouement of every fixed-exchange rate system and every monetary union that fails to meet the four basic conditions of an optimal currency area. These are labour mobility across borders, wage and price flexibility, fiscal transfers and aligned business cycles. The euro area meets none of them."
Does not look so good?

Phew. Glad I'm with PostFinance!

This will be the Postfinance that is currently rumoured to be in the cross hairs of the US tax investigation?
& they are a candidate for being privatised

European Central Bank in a surprise move today cut 0.25% from their interest rates - theoretically the SNB should follow suit & cut to a negative rate but they did not change after the last ECB cut so probably will not this time.
Also theoretically this cut should drive up the value of the Swiss Franc versus the euro but nothing follows logic in this market any more.

We live in interesting times, don't we?

Maybe in the end we see Switzerland fully adopting Euro
I don't know how they can keep being competitive, if CHF becomes more expensive... Interesting times ahead for sure...

Since the CHF is nowadays an almost a 100% derivative of the Euro there is no need to adopt the Euro. It would only be a political statement and right now produce too much political fallout.

Since the CHF is almost equivalent to the Euro there is more a need to balance the interest rates which is now being achieved by dropping the Euro rate closer to the CHF value.

About "by dropping the Euro rate closer to the CHF value" egg/chicken, chicken/egg etc.


Not sure Mario Draghi would like his convoluted theories & plans reduced to "tracking Swiss rates"


Assuming he reads EF which has a vanishingly small probability

I would be very careful in calling the CHF a "derivative" of the Euro.

The "only" two things which happened are:

1. Euro becoming instable and maybe breaking up (since ~2009)
2. SNB introducing a floor (not a peg) at 1.20, because too many stakeholders escaped from the € into the "safe" Franc, leading to a massive over-valuation (which is still ongoing)

Takeaways:

1. Should the Euro stabilise, the Franc will gradually go down against the €, possibly towards its former longterm band between ~1.50 and ~1.70
2. Should the Euro collapse, SNB can revoke the 1.20 ceiling at any time, and an fx-rate of 0.9 is possible within a few hours.

Just because it looks sort-of-stable right now, doesn´t mean it really is. It´s a massive bet, which I wouldn´t call a derivative.

Seems that Standard & Poors have taken away the EU's AAA rating and reduced it to AA+.

Probably will not mean anything important changes but will generate some red faces in the EU?

And it's all the UK's fault.


"The European Union has lost its AAA credit rating after the Standard and Poor ratings agency warned that David Cameron’s referendum promise and increased squabbling over Brussels spending raised doubts over its future. "

As will (well, might - if anybody reads it outside of Switzerland) Mr Burkhalter's fear that the EU might just implode after the UK leaves the party:
http://www.tagesanzeiger.ch/schweiz/...story/25686618

If the EU implodes, the resulting blackhole will either swallow Switzerland directly, or we'll get atomized while crossing the event-horizon....

This thread has long been quiet.

The ECB just offered banks cheap long term 4 year loans at circa 0.05% for 400Bn euros but the banks only took circa 82Bn.
Do the banks really think it will be so difficult to lend out money at higher rates?

Sentix group are forecasting the eurozone may fall back into recession.
Draghi (ECB head) has done a good job of "talking up" the euro but actions are always stronger than words

Now the IMF are also forecasting the eurozone may fall back into recession.

And the price of Brent crude oil is hovering around Jan 2011 levels.

ECB left interest rates unchanged today, see here.

Eurozone growth forecasts are also being slashed.

The euro continues to drop on FX exchanges with same thing happening to the USD-CHF. I have to pay expenses for my parents US hospitalization and nursing care and think I have to convert money now to dollars before it goes from .97 to past parity. I am not expert on these matters but every one seems to be betting that the USD will continue to climb against the euro and the CHF.

Netherlands, Germany Have Euro Disaster Plan - Possible Return to Guilder and Mark
Zero Hedge article 11/28/2014

The Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis it has emerged. These plans remain in place.

http://www.zerohedge.com/news/2014-1...ilder-and-mark

If this does happen the Swiss will be standing around looking silly with egg on their face after having subsidized the Euro to how many millions of newly printed Francs?

Unfortunately, it's not millions, but billions, with a "b".
174 billion, more or less:
http://www.snb.ch/ext/stats/balsnb/p...r_SNB.book.pdf
(And 142 billion USD, the rest is really peanuts).

As per end of October 2014.