It’s a holiday in the USA today … here’s some holiday reading … in case you weren’t aware …

The SNB is 48% Privately Owned…No Wonder They De-pegged

  • Many economists believe that balance sheet losses are irrelevant for a central bank, so they should play no role in policy.
  • But the SNB is 45 per cent owned by private shareholders, many of whom are individuals, who receive dividends from the SNB. The rest is owned by the cantons, which have been complaining recently about insufficient cash transfers from the SNB.
  • This ownership structure contrasts sharply with most other central banks, which are in effect government departments, wholly owned by the treasury and therefore the taxpayer.
  • The Swiss set-up makes the SNB particularly concerned about balance sheet losses, especially since disgruntled citizens can directly force changes in monetary and reserves policy via referendum.”
  • If I owned 45% of the SNB and balance sheet expansion could potentially result in me footing the bill in the case of losses then my red phone to Thomas Jordan (head of the SNB) would taped to my face. I know, I know, a Central Bank can’t “run out of money”, but theory is only useful so long as it actually applies to reality and there is the potential here that reality trumps theory. And the reality here is that politics makes theory a very messy place some times.

More at the link