Swiss central bank calls negative rates essential, but tell that to pension funds

Section:

SNB Negative Rates Are Vital, Swiss Government Tells Politicians

By Catherine Bosley
Bloomberg News
Friday, February 14, 2020

The Swiss National Bank's negative interest rates are essential and a premature tightening would hurt the economy, according to the government.

n a closed-door meeting with leading politicians, representatives of Switzerland's executive explained why subzero rates are important "despite unwanted side effects." The formal Von-Wattenwyl talks are conducted twice annually, on a variety of topics.

... Dispatch continues below ...


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"Getting rid of the negative rates prematurely would involve a high economic cost," the government said in a statement released today. ...

... For the remainder of the report:

https://www.bloomberg.com/news/articles/2020-02-14/snb-negative-rates-ar...

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Funds Face Trillion-Dollar Hit on Negative-Yielding Debt Pile

By William Shaw
Bloomberg News
Friday, February 14, 2020

The slide of so many bond yields below zero may cost pension funds and other institutional investors a trillion dollars this year.

Investors could lose $864 billion on debt with negative yields over the next 12 months, according to Daniel Tenengauzer, head of markets strategy at Bank of New York Mellon Corp. He predicts bond holders could separately shed another $176 billion in lost purchasing power through the securities, which would guarantee a loss if held to maturity.

Around the world, traders must pay to lend on $13 trillion of debt as the coronavirus and heightened economic uncertainty help to underpin demand for the safest assets. Retirement funds are particularly exposed because they have few other secure places to store their assets, but need to generate returns to support pension holders into old age. ...

... For the remainder of the report:

https://www.bloomberg.com/news/articles/2020-02-14/funds-face-trillion-d...

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