Swiss central bank reports 2013 loss on gold
Swiss National Bank President Thomas Jordan in Bern, Switzerland, April 26, 2013. THE CANADIAN PRESS/AP, Keystone, Peter Schneider
GENEVA - Switzerland's central bank has reported a loss of 9 billion Swiss francs ($9.9 billion) for 2013, denying shareholders and local governments any annual profit sharing.
The Swiss National Bank said Monday that it lost 15 billion francs in the value of its gold holdings, but that was partly offset by a gain of 3 billion francs in foreign currency and more than 3 billion francs in profits from selling its stabilization fund that bailed out Swiss bank UBS AG.
In a statement, the bank said it could not provide dividends to shareholders or profits to the Swiss government and the country's 26 cantons (states), which could spell problems in 2014 because many of their budgets rely on the proceeds. Gold prices fell sharply in 2013 as the U.S. Federal Reserve wound down an inflation policy that had driven up gold prices.
The losses could dim a popular push for more domestic gold holdings.
Last year, Switzerland's seven-member ruling Federal Council, which includes the president and other ministers, said they opposed a plan contained in a popular referendum that would require Switzerland's central bank to keep at least 20 per cent of its assets in gold and all of those on Swiss soil. The council said parliament should recommend that people vote "no" so the central bank's ability to keep prices stable won't be restricted.
The proposal known as "Save our Swiss Gold" came from the nationalist Swiss People's Party, which has gathered enough signatures to put the referendum before Swiss voters sometime in the next few years.
Swiss National Bank President Thomas Jordan told shareholders last year that the referendum, which would ban the central bank from selling any gold reserves or storing them abroad, and require at least 20 per cent of its assets to be held in gold, was "counterproductive" because it would not guarantee price stability or improve the nation's emergency preparedness.
Gold made up just over 10 per cent of the central bank's nearly 500 billion Swiss francs ($537 billion) in assets at the start of 2013.