Switzerland’s national bank announces a huge loss. The $143 billion loss last year was the largest in the 116-year history of the regulator.
The Swiss National Bank said Monday that, based on preliminary estimates, it had its biggest annual loss in its 116-year history. This was because falling stock and fixed-income markets hurt the value of its stock and bond portfolios.
The SNB lost about 132 billion francs ($143 billion) in 2022, which is about 18% of Switzerland’s projected gross domestic product and five times more than its previous record loss of 25 billion francs ($25 billion) in 2015.
Almost all of the loss, 131 billion francs ($142.8 billion), was due to collapsed foreign currency positions. As part of a plan to weaken the Swiss franc, the bank bought around $1 billion worth of stocks and bonds. This was partly made up for by the fact that the value of the bank’s gold holdings went up by $435.9 million.
The Swiss central bank’s foreign exchange reserves lost about 17% of their value last year. In December, they were worth 784 billion francs ($854.4 billion), down from 945 billion francs ($1 trillion) a year earlier, when the SNB made a profit of $28.3 billion.
Because of the loss in 2022, the SNB won’t be able to give any profits to the central or local governments of Switzerland. It will only be the second time since it started in 1906 that it hasn’t paid out. Last year, the Swiss central bank gave $6.5 billion to the federal government and the cantons. Because of this, the federal government and the cantons will have to change how they plan to spend the money.