EUR/CHF peg beeing attacked for the first time

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The Swiss National Bank (SNB) has started to "diversify" 10% it's fx reserves into (get this) "passive stock index investments". They're replicating different national stock indexes on their own. That led them to become a major shareholder in Nokia, with a position large enough to be reportable. Stupidity at it's best.

Our central bank is now nearly as stupid as the Norwegian sovereign wealth fund which got burned both in subprime as well as PIIGS bonds by their advisor ... Goldman Sachs.
 
... Credit Suisse ... just announced that going forward it will be charging for firms to hold a CHF cash balance - i.e. the bank, given the already-negative Swiss government bond yields, has moved to its own NIRP for its clients. ... As we have warned before, it seems that the currency wars that appear to have escalated have now started the 'capital control' wars as CS (and implicitly the SNB) adds this negative interest rate 'charge' to its already pegged currency in the vain hope of managing the unmanageable flow of safe-haven-seeking cash.

•CREDIT SUISSE INFORMS BANK CLIENTS OF NEGATIVE RATES ON CHF FROM DEC.10
•CREDIT SUISSE INFORMS CLIENTS IN SWIFT NOTICE, CONFIRMED BY BNK

In other words, Europe is so fixed, Swiss banks are furiously doing everything in their power to halt the dumping of EUR in exchange for CHF, and to push everyone, kicking and screaming, into the absolutely safety and well-being of the Euro ...
Click to expand...

http://www.zerohedge.com/news/2012-...credit-suisse-sets-negative-chf-deposit-rates

:paperbag:
 
The weird part of the story is that UBS didn't follow the move.
That means a lot of deposits could be transferred to them. Maybe UBS is waiting for a few days and reacts then. A synchronized announcement of NIRs on deposits by both Swiss tbtfb (CS and UBS) could have stirred up consequences from Swiss anti-trust law enforcers. However, I don't think that CS just came up with the NIR idea. My guess is that they were told to apply it by the SNB. Such a move is usually politically sanctioned somehow.
 
...so tell me again, why it is that investors wouldn't get some PMs now, instead of these nice pieces of paper? :flail:

:rotflmbo:
 
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