SNB says there will be fewer exemptions from negative interest rates
SNB tightens the net on those to bear the brunt of negative rates
- Negative rate will also apply to public entities
- Sight deposit accounts of Zurich and Geneva to be wound up
- Account of SNB pension fund will be subject to negative rates
- New rules to come into play May 1st
- Accounts will have CHF10m minimum exemption
The SNB kept the negative rate to particular limits on who it would affect. Now they are snaring more domestic accounts into the pot.
Swiss pairs have ripped higher on the news which is likely to lead to money flowing out of Switzerland looking for better yield elsewhere
Here's the full release from the SNB;
Fewer exemptions from negative interest on sight deposit accounts at SNB
Swiss National Bank completes review. The Swiss National Bank (SNB) has completed its review of exemptions, and has considerably reduced the group of sight deposit account holders that are exempt from negative interest.
Specifically, negative interest will now also apply to the sight deposit accounts held at the SNB by enterprises associated with the Confederation, including PUBLICA, the pension fund of the Confederation.
The affected account holders will be accorded the minimum exemption threshold of CHF 10 million, to which negative interest does not apply. In addition, the accounts of the cantons of Geneva and Zurich, as well as that of the City of Zurich, will be wound up. These three accounts had scarcely been used in recent times, and the account holders no longer fall within the SNB's current scope of business.
The account of the SNB pension fund will henceforth also be subject to negative interest. In future, the only sight deposit accounts to be exempt from negative interest will be those of the central Federal Administration and the compensation funds for old age and survivors' insurance, disability insurance and the fund for loss of earned income(AHV/AVS; IV/AI; EO/APG).However, the SNB will continue to monitor developments in the balances on these accounts