Swiss National Bank chairman won’t exclude more rate cuts

Swiss National Bank Chairman Thomas Jordan cannot exclude more interest rate cuts, he said in an interview published on Wednesday, although such a step was not needed now.

“We can’t rule it out,” Jordan said told Swiss newspaper Blick when asked whether the SNB’s minus 0.75% interest rate – one of the lowest in the world – could be lowered further.

“But we carry out a very precise cost-benefit analysis and we would never simply cut the interest rates if that brought no benefit. At the moment, however, a further reduction is not necessary.”

Negative interest rates have become increasingly controversial in Switzerland. Banks say they punish savers and risk producing asset bubbles.

Several Swiss banks, including UBS , Credit Suisse  and Julius Baer have passed on the cost of negative rates to rich customers, triggering an outcry from the Swiss Bankers Association, which said ultra-low rates damage the country’s pension system.

The SNB last week kept its rates locked down at minus 0.75%, the same level it has for nearly five years, and indicated negative rates would remain in place for the foreseeable future.

source: Reuters