Swiss Depositors Confused By Concept Of NIRP As Swiss Deposits Jump Most In 18 Months

Tyler Durden's picture

This wasn't supposed to happen. The Swiss National Bank has a problem - having announced on Dec 18th that it will impose negative deposit rates starting Jan 22nd, sight deposits soared (as opposed to the textbook expectations). Sight deposits (cash-like deposits commercial banks hold with the central bank) rose CHF10.8 billion this week (or 3.4%) - the most in over 18 months.



Looks like we are going to need moar negative-er rates...


Chart: Bloomberg

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ShorTed's picture

Uh yeah, 'cause it's not Jan 22nd yet.

Dr. Engali's picture

Because there is nothing like front running a rate cut to get that whole 0.15% "return" on your money for one month.

SoilMyselfRotten's picture

You lost that much on your drive to the bank

ZH Snob's picture

the swiss appear to be gluttons for punishment. at this rate they will certainly get theirs.

SelfGov's picture

Why would big business throw a lot of money into accounts with negative interest rates?

Because they know that returns everywhere else will be far less.

Somebody knows something and that somebody isn't me.

mantrid's picture

or that 'everywhere else' will have a problem returning their money back...

Pool Shark's picture



Cash*, Bonds, Gold.


[*Note: "Cash" does not include bank deposits.]


LawsofPhysics's picture

Yep, it would appear that the physical version of everything is more valuable than the paper version.

Pool Shark's picture



When it comes to "Cash" I prefer the paper version...

[as opposed to the fictitious 'electronic' version, or mere numbers on a monthly statement. Worked better for citizens of Cyprus...]

"If you don't hold it, you don't own it."

Mountainview's picture

In case of Switzerland demand for CHF 1000 bills is exploding. The circulation of these bills went up from CHF 24 billion in 2007 to CHF 38 billion this year. The owners don't have to worry about their banking relationship, the bills are easy to move and leave no trace. Seems attractive enough for many investors.

Arnold's picture

Cue Bitcoin commenters.......3.......2.......

F22's picture

Gold, cash*, bonds....

There....fixed it for ya.

Pool Shark's picture



I have them listed in the order in which I would be willing to liquidate them in the event of a crisis...


NotApplicable's picture

"Return of" rather than "return on" is the key here, I'm guessing.

How long of a bank holiday can you and/or your business withstand?

This should be fun to watch.

Hal n back's picture

think of big business which huge float that they cannot invest-but lease sitting in accounts-not as much as years ago buy sell need to maintaine balances-when the banks go under and bail ins occur--big business should be drawing down cash and put it who knows  where--as long as its not in a bank.


governments try to fix or defer one problem and wind up creating 2 new problems.

Dr. Engali's picture

People are fucking retarded.

seek's picture

More like fucking scared. And retarded, too, I'll grant you that.

mkkby's picture

Actually, Dr. -- YOU are the one who is retarded. 

This ain't mom and dad with a few hundred euro -- of course they can take phys cash or PMs out of the system.  This is businesses that have millions and can't afford to be the next unsecured lender that the banks fuck over. 

Dealing with cash or PMs is useles to them.  They might as well go out of business now if that's the only way to protect your money.

SelfGov's picture

It is strange that the amount of sight deposits went up just as oil began falling.

PontifexMaximus's picture

Doesn't buying EUR create increased sight deposits with comm. banks? Look for next SNB monthly report.

trader1's picture

you may want to ask vitol what they know that you don't know:

The Vitol Group is a Swiss-based, Dutch-owned multinational energy and commodity trading company. It was founded in Rotterdam in 1966 by Henk Viëtor and Jacques Detiger,[1][2] and is a private company, with 3,200 employees making up its shareholders. Head offices are located in Rotterdam and Geneva, Switzerland. With 2013 revenues of $307 billion (up from $303 billion in 2012), the company ships more than 270 million tonnes of crude oil per year and is the largest independent energy trader in the world.[4]


other noteworthy facts:

In 1995, Vitol secretly supplied Slobodan Miloševi?'s government with oil.[18] The Observer revealed in 2001 that Vitol paid 1 million pounds to Serbian war criminal Željko Ražnatovi?to settle an oil deal with Miloševi?.[19] Vitol has denied all charges, arguing that no government agency has ever prosecuted the company in this respect.[20]

In 2007, Vitol pleaded guilty to grand larceny in a New York court for paying surcharges to Iraq's national oil company during Saddam's regime and circumventing the UN oil-for-foodprogram. Vitol subsequently paid $17.5 million in restitution for its actions.[21]

Vitol was the company to organise the first controversial sale of Libyan rebel oil to Tesoro Corporation in early April 2011.[22] According to the Financial Times, the company was approached by the Qatari national oil company to sell a cargo of crude oil supplied by the Libyans in exchange for technological supplies and fuel for the National Transitional Council of Libya.[23]

In September 2012, Reuters revealed that the company had bought and sold Iranian fuel oil, bypassing an EU embargo against Teheran. Vitol bought 2 million barrels using a ship-to-ship transfer off the coast of Malaysia from a National Iranian Tanker Company vessel and sold it to Chinese traders. Being based in Switzerland, which did not implement Western sanctions, Vitol skirted the charges.[24]

In 2013, it was revealed that the company had been using for over a decade an Employee Benefit Trust, avoiding paying income tax for its UK staff.[25]

MrPoopypants's picture

It is Spaniards and Greeks who fear a far more negative rate of interest (confiscation) in their home countries.

KnuckleDragger-X's picture

Spain is in a world of hurt and can't figure out anyway to get out from under their disaster. The Greeks however gave us Thermopylae and are willing to do it agaian.

DonutBoy's picture

Ahh I wish it were true, but it's not.  That culture is long gone. Greece is old, literally, they have had few children.  The motivated children, the 300, have left the building.

KnuckleDragger-X's picture

The empire is long gone but the people are still there and they have a long memory. That's one of the problems with Iran, they want to bring back the Persian empire, under theocratic control of course.

Bill of Rights's picture

New 52 week low USO...


WTI setup is clear as day


Hal n back's picture

what set up--who wants to trade the manipulation and globally weak economies.

SmokinMonkey's picture

Is this what happens before they "save us" with one world currency?  

KnuckleDragger-X's picture

They are going to try anyway.....

ejmoosa's picture

Until they eliminate precious metals, there will never be one world currency.

inthemist's picture

PM have always been the 'one world currency'...

Spungo's picture

It's almost like they're acting crazy just to make a point.
"Discouraging saving by taxing it? Well then I'll just save harder, mom!"

farmboy's picture

Anyone that tries closing the gate must not be surprised if the people that know rush in.

bluskyes's picture

Hell, anyone can provide banking services offering negative interest rates.
Give me $1,000 today, and I will give you $950 next year.

I should start issuing negative interest rate coupon bonds.

Hazlitt's picture

Either loss minimization in financial repression is occurring, or people want nominally free checking/savings while they still have it (and locking that in if that's even possible anywhere).

Either way, someone is frontrunning.

ConfederateH's picture

Most people, probably Thomas Jordan included, think that Hildebrand's folly (the peg) is what stopped the CHF-EUR explosion.  What really happened is that Hildebrand's Swiss frank drunken sailer spending spree gave Draghi the time and leverage he needed for his temporory bail outs of Greece, Spain, Portugal. Also bailouted out by SNB's bailout of the EUR were those Austrian and Hungarian banks that had made low interest CHF home loans in "New" europe and the major Swiss banks. 

But Draghi, like Bernanke and Yellen, is there to maintain the status quo and he has no interest in any real improvement.  So nothing has been fixed in Europe, or the US.  The EU is financially leaking badly, while Switzerland is still solvent.

The peg is going to break, and currency speculators both big and small smell blood.

Afterwards, once again, the AngloZionist will find some special punishment to be meted out to Switzerland

ebworthen's picture

Maybe they'll be able to deduct the -% on deposits from their taxes?

Seasmoke's picture

They are just going to make it up, in volume.

Mike Honcho's picture

Hopefully Blumberg will do a follow up piece once everyone gets their January statements.

paint it red call it hell's picture

Hey Swissy, wish now that gold referendum had passed?

IronShield's picture

Hmmm...  These days, one should be more interested in return of principal as opposed to return on principal.  ;-)

IronShield's picture

That is until Hyperinflation kicks in; then, who gives a $hit.  Pass the stack so I can wipe my @ss.  ;-)

jimijon's picture

Quantum Financial Dynamic Model vs Newtonian Financial Model.

Alea Iactaest's picture

The Bank of England is using Facebook and Twitter to help set interest rates

Toronto Kid's picture

The Bank of England is still paying off debt from the 1720s South Sea Bubble:

That they use Twitter to set interest rates does not surprise me in the least.

LawsofPhysics's picture

Flight to "safety"...

no really, losing a few percent is better than losing it all...


If you can't physically touch and defend "it", you don't own whatever it is...

Of course the Swiss are rather well armed. This could get interesting.

mkkby's picture

You must be brain dead too.  How does phys protect a business with millions of euro and a need for liquidity?

This is not mom and pop with tiny accounts.  Obviously, they can get out of the system.  Even though bail ins won't affect them at all.

Stick to physics, if you even know anything about that... doubtful since this is so obvious.

wagthetails's picture

i wouldn't say there is any correlation on small moves.  over the period shown on the chart, i doubt many depositors were moving funds in and out of deposits based on 10bp swings.  even at a negative 35bps....what is that on the average account size?  probably not even the cost of one overdraft fee.  I think we get in the trap of measuring things so infinitesimally it loses its meaning. 

-0.35%?  were people complaining in 1982 when they were getting screwed by -8.0%?  yes some were, but the vast majority of people had no idea the bank was giving you 8% interest on your deposits, while they kept it in fed funds at 16%.  now that was a royal screwing....not that there was any other way for the banking system to survive.