ZURICH Feb 21 Commercial banks paid more to
park cash at the Swiss National Bank in 2016, as the central
bank's currency interventions inflated their deposits with the
SNB and generated more charges in the form of negative interest
Data published by the SNB on Tuesday showed banks' total
sight deposits at the central bank were 465.09 billion Swiss
francs ($460.71 billion) based on average daily figures in
December 2016, some 15 percent higher from a year before.
Since January 2015 the SNB has charged banks with Swiss
licenses 0.75 percent on deposits held at the central bank which
exceed 20 times the lender's minimum reserve requirement.
Deposits subject to negative interest rates rose by roughly
30 percent over the course of 2016, according to Reuters
Negative interest rates and currency interventions are the
SNB's two-pillared approach to reduce the franc's attractiveness
and stem inflows to the safe-haven currency.
Sight deposits are seen as a guide to the central bank's
intervention in foreign currency markets. To weaken the franc
against the euro, the SNB buys euros and credits the
corresponding franc value to banks' SNB accounts.
While holdings subject to negative rates rose across all
three banking categories listed by the SNB, it was particularly
pronounced for Switzerland's two biggest banks, UBS and
In 2016, sight deposits held by the two jointly rose nearly
36 percent, while their combined average of deposits subject to
negative interest rates quadrupled compared to 2015.
Until June 2015, the two big banks' combined deposits had
fallen below the exemption threshold.
The SNB generated 1.1 billion Swiss francs from negative
interest charged to banks and other deposit-holding institutions
in the first nine months of 2016, just below the 1.2 billion
francs generated for all of 2015.
While the SNB has not yet given a figure for how much it
pocketed from the charge in full-year 2016, analysts estimate
the figure to be around 1.5 billion francs.
($1 = 1.0095 Swiss francs)
(Editing by Catherine Evans)