SNB Equity Is Too Low for Balance Sheet Risks, Schlegel Says.

The Swiss National Bank's President, Martin Schlegel, believes that the bank's equity is insufficient to cover the risks posed by its large balance sheet. He emphasized the need to prioritize increasing the central bank's capital base over distributing profits to the Swiss government and cantons. Schlegel's comments suggest that the SNB may not make a payout to the state this year, despite posting a solid profit in the first nine months. The institution's large balance sheet is a result of foreign-currency purchases made to stabilize the franc after the 2008 global financial crisis, with Schlegel noting that the currency's impact on inflation is significant due to the Swiss economy's openness. [Extracted from the article]