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Head Of Largest Swiss Cantonal Bank Says Swiss Capital Controls Are "Certainly Possible"
Yesterday, when we reported that the SNB had hinted at that most dreaded of possibilities for central planners, one which always implies full loss of central bank credibility, namely capital control, for some inexplicable reason various readers and even contributors ("Another misleading headline by the Tylers. What yellow journalism") got offended that we dared to point out that the central bank which two days before it crushed FX traders by ending its CHF cap had sworn that "we are convinced that the minimum exchange rate must remain the cornerstone of our monetary policy."
Turns out "yellow journalism" as some call it - usually those who have conflicts of interest and/or put trades in the opposite direction - was spot on once again. Because if yesterday, the SNB's Jordan merely hinted at capital controls when as he was quoted by Bloomberg (not Reuters), as saying that capital controls "was not a measure that is at the forefront at the moment",which as we explained "the best way to admit the possibility of capital controls is to not explicitly, and unequivocally reject them. That there is even a possibility of capital controls in a central bank's arsenal, and everyone suddenly begins to pay attention" then today the head of the largest Swiss cantonal bank, and the fourth largest Swiss Bank, the Zurich Cantonal Bank or ZCB, came out and explicitly said what so many fear (and which warning they would ascribe to as the case may be "yellow journalism"), namely that "lowering Swiss National Bank’s already negative interest rate further or implementing capital controls would be "dramatic" but "certainly possible."
This is what Zuercher Kantonalbank CEO Martin Scholl said in interview with newspaper Neue Zuercher Zeitung am Sonntag.
And just so readers (and so-called contributors) can blame the NZZ of fanning "yellow journalism" here is the explit quote from the interview:
Würde sich das ändern, falls die Nationalbank die Zinsen noch weiter ins Negative drückt?
Die SNB soll die Massnahmen ergreifen, die langfristig aus ihrer Sicht für die Schweiz sinnvoll sind. Sie könnte noch einmal an der Zinsschraube drehen oder Kapitalverkehrskontrollen erheben. Das wäre in einer globalisierten Wirtschaft zwar dramatisch, aber sicher denkbar. Es ist nicht an uns, Ratschläge zu erteilen.
And in English:
The SNB will take the measures which, in their view are meaningful for Switzerland in the long term. You could again turn the interest rate screw (lower rates) or raise capital controls. That would be in a globalized economy is dramatic, but certainly possible. It is not up to us to give advice.
Why? Because admitting that anything is possible is the only option when your central bank has begun to lose control, and yes: it is up the SNB's Jordan to make the decision on his own: a decision which as he said is not at the forefront "at the moment." What about the "next moment", in the proverbial "tomorrow", if and when as Alan Greenspan predicted earlier today, Greece exits the Eurozone, and Switzerland is flooded with fresh billions in capital rushing to find a place where it won't be denominated into the New Drachma, or New Lira, or New Peseta?
Or perhaps the same outraged readers expect to get an explicit warning from the SNB that beginning on date X all flows of (EUR and/or New Drachma) capital into Switzerland will be halted until further notice (just like Denmark's recent and "completely expected" halt of bond issuance in attempting the first bizarro QE when instead of boosting demand it would push the price of its longer-dated bonds higher by ending their supply).
As usual, we merely present what's out there, as crazy and illogical as it may seem to those who are still unaware that in the NIRP Normal, where as Zero Hedge for years, and most recently Russell Napier explained central banks are losing control, anything goes. It is up to others to decide how to best make use of the available information, or not at all.
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These central bankers will do whatever they have to do in order to insure the precous is protected. 8 days and the Greeks will show the world what happend when you question these bankers
Jawboning to deter inflow!
Yup. What you do, when you don't know what you are doing.
Globally the ELITE (the REAL terrorists), as predicted, are PANICKING and getting fricking hysterical again.
They tend to do that WHENEVER THEY FEAR THAT THEIR ABILITY TO CONTINUE TO KEEP US ENSLAVED AND STEAL EVERYTHING FROM US IS BEING THREATENED.
THEIR WORST FEAR IS THAT WE THE PEOPLE WILL TAKE OUR MONEY PRINTING PRESSES AWAY FROM THEM.
AND WE WILL TAKE OUR MONEY PRINTING PRESS BACK FROM THEM. SOON. AND GLOBALLY.
And we will find them, and those that aided them.
Keep up the yellow journalism Tylers.
It's as good as gold.
LOLOLOLOL I'm late to the party but I love how he called out M2M!!!!! PWNED (are the kids still using that one?)!!!!!!!
Yeah, I'm not sure I understand this either. Capital controls are normally instituted to prevent a massive outflow of capital not an in flow. Is the SNB worried about a collapse in the Swiss Franc?
Just take all those euro's and start buying gold with them.
Other way around. They think the strong currency hurts exports.
Swiss cheese and cuckoo clocks? Dearest leader will buy Swiss cheese at any price;)
Seriously though, big currency swings make trade problematic. Inherent in being a small duck in a big pond.
They are used to control capital flows - direction depends on situation, but if you are trying to restrict outflows you do so because money is flowing SOMEWHERE and Somewhere just might want to restrict INFLOWS
I'm not sure what is so hard to understand. We are talking about negative interest rates. So if you were a foriegn investor, would you want to give a country a billion or so with the promise they will repay you less than that billion. Yea, in that circumstance, I would expect capital outflows.
But here is the the game. The game has risen to a new level of competing negative interest rates. So now it's not a question of where do I park some money to earn meager interest, but where to I park that money not to lose as much principle. Of course the answer ultimately is that most all fiat will fail but we are still not at that point.
Meanwhile, as I have said for years now and haven't been wrong yet, commodites including PMs will go down as they did in the Great Depression. Don't you think there were people that were all about PMs prior to the Great Depression? They lost their shirts. They ended having to sell low just to make ends meet or starve to death.
Here are the gold prices of some years before and after the GD
1879-1932 = 20.67
1933 = 32.32
1934 = 35.00
how did they end up having to sell low?
Capital Controls = control of money = control of people.
You labor for money, so when your money is imprisoned - so are you.
I wonder if they will put capital controls on the black money accounts that fund groups like ISIS and other intelligence ops. or if they will limit how much money the senators and congressman can get from their accounts.
what's really funny though is the irony of these muderous cheats paying negative interest to hide their cash.
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he can smile and say the above, as a bankster, the banks are booking profits from those policies..and in the end it seems it's all about the international banksters well being, NO?
The SNB doesn't want to get caught flat footed "again" by the actions of the ECB so the SNB will act first before the grexist. In the poker game of central banks this looks like a 'tell' to me.
Unlike Bruce Krasting, I see the Swiss dilemma. They have one of the few decent currencies in the world surrounded by the Euro trash of the Euro. Capital controls never work, especially when you are surrounded by the problem. To hell with the peg. The currency is already too strong too fast.
Why not try this? Take in all the hot money, and invest it in a basket of PMs, gold, palladium, platinum, all of it. Little or no risk, and it might teach the buggers a few things about money.
Looks like this season, yellow is the new black.
Goldman's muppet banks are lowering rates. The Squid's bank would be raising them. Being the best of the worst is not a long term strategy. Raise rates now and be solvent tomorrow.
IF Banksters Inc. believes that they are starting to lose control then you can be certain WAR is just around the corner. Not some little dust up either. Generals like Presidents do as they are told. They are in place to do the bidding of their masters, the money changers.
Bombing, blowing up, slaughtering 1000's, 10,000's is the cost of doing business. Banksters Inc. AKA Beelzebubs spawn would sooner see half the world on fire than face the only thing that does indeed terrify them.... Losing control!
Never did I expect that I would be reading about the end of the world from a mental hospital.
There will not be any shift to the Drachma get over it. No politician German/Greek/Martian has the balls for it. Shame because it is a golden opportunity for Greece to break away from the bankrupt financialized farce the West has become.
Y series Euro are effectively Drachma... if the CB in Athens starts printing them to pay back the IMF etc
http://www.thisismoney.co.uk/money/news/article-2145882/How-tell-euro-no...
I always say, nothing is certain until it's officially denied.
Things are getting fucky. Very fucky.
I actually got my scuba gear out and retrieved some silver from my safe depos....err.... treasure chest at the bottom of the lake. (Just in case there is a lake run)
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Since before Frederick Schiller penned "WilliamTell" the Swiss have been about maintaining their frredom from European imperialists. In the end the current batch of Brussels bureaucrats are no different than Hapsburgs, Hoenzollerns or Nepoleons.
Interesting, never heard of the Hohenzollern trying to invade Switzerland. Seems you are one of those guys educated in a `Murican High School.
Clearly there are other ways of exerting control over others short or military invasion. But then an intelect deeper than a rain puddle would know that. That said imperialism is imperialism is imperialism. Neither the house of The Saxe-Coburg and Gotha/Windsors or house of Pavlovich tried to invade Switzerland either but no one would say they wern't/arent pernicious imperialists. Seems your one of those arrogant euro trash who think they know better than anyone else.
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Neva doubt da Tylers!
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V-V
remember the days when banks used to compete for depositor's money? Now they're like: GTFO of heya with dat money ya deadbeat bitchez!
Surely there's capital controls and there's capital controls? I've only ever heard about the ones designed to keep capital IN. We seem to be talking about controls to keep capital OUT. What a great potition to be in.
https://books.google.de/books?id=EjO17QAGtbsC&pg=PA240&lpg=PA240&dq=bard...
Swiss have done it before with Bardepot - they have a long history of speculative inflows when Lira crises were present or the US Dollar floated in 1973. Whether they are effective is another thing. Personally I think the Swiss ought to do Rouble Swaps to keep the Franc stable
1975: open a savings account get a free toaster
2015: open a savings account we literally hit you with a toaster
Times they are a changin'... [/Dylan]
Dead on target.
All roads lead to the Melting up USD and Gold.
I'm sorry, but I need fellow ZHers to help me out here.
As far as I can see, Switzerland are in a healthy position with good demand for their currency. It is sought after and strong against other fiats.
So why are capital controls even being thoughts of?
Am I missing something?
Please help. Sorry for my ignorance....
In todays bizzaro world all the countries strive to lower their currencies to stay short/medium term competitive. Imaging if Switzerland (CH) would still be on the gold standard, the USD & EUR would trade at pennies to the CHF. Very few people could afford visiting CH.
However, CH has no commodities so it has to import them in USD/EUR to refine them into superb products. This would reduce the CH production costs basis but would also lower CH wages, because of shifting production to other countries or decreasing prices of export items. Then again CH wages are one of the highest in the world.
Hence too many lobbyist in tourism, agriculture and manufacturing supporting the actions of the SNB for a weak currency, in order not to change their status quo.
Thanks, Ratscam.
Seems plausible.....in a modern-day-economics-twisted-logic kind of way. :O)
The final point made in the Tylers' piece yesterday on capital controls indicating where the tsunami of liquidity that the Swiss deflect will likely end up is a good one.
I think this would be called, peak fiat.
one countries capital controls are another's BIS. sanctions.
I think if I were the capitalist in Switzerland, I'd back whatever got their country through the next 3 years without having soros, and friends telling you what your labor, and product is worth.