The Swiss National Bank (SNB) announced an annual loss of 132.5 billion Swiss francs ($141.54 billion), in line with its provisional figures from January.
This marks the largest loss in the central bank’s 115-year history, driven by declines in bond and stock markets that negatively impacted the value of its investments.
The strengthening of the Swiss franc also played a role, reducing the value of the SNB’s foreign investments when converted back into francs.
The loss, which follows a profit of 26 billion francs in 2021, means the SNB will not distribute any payouts to the Swiss central or regional governments or dividends to investors for only the second time since its founding in 1907.
Most of the shortfall—131.5 billion francs—was due to losses on foreign currency positions, with bond holdings down by 72 billion francs and the share portfolio declining by 41 billion francs.
The loss wiped out the SNB’s distribution reserve of 102.5 billion francs, leaving a net loss of 39.5 billion francs after provisions were allocated.
The SNB has not commented on how this record loss might impact its future monetary policy, with the next update due on March 23.
Analysts believe the loss is unlikely to affect monetary policy in the short term, as the SNB still holds 66 billion francs in equity despite the substantial losses.
“Even if equity was wiped out altogether, this wouldn’t change monetary policy in the short term as the SNB can operate without equity,” said UBS economist Alessandro Bee.
Bee added that only a prolonged period of negative equity could potentially impact monetary policy, but such a scenario is far off, even after last year’s significant losses.
