(Bloomberg) --
The Swiss National Bank plans to make a bigger payout to the government from its 49 billion-franc ($50 billion) profit, a move aimed at dousing some of the criticism of its monetary policy.
Lifted by last year’s rallying equity markets, income from the central bank’s mountain of foreign currency holdings totaled 40 billion francs, with an additional 2 billion earned on negative interest rates.
The figures come at a time of intense criticism of sub-zero interest rates, and to get ahead of any further backlash, the SNB is looking at increasing its annual payout to the government and cantons. It already plans to distribute 2 billion francs, and a decision on the extra payout will be made before the SNB publishes final results in early March.
“The high level of the distribution reserve would allow the SNB to make a limited increase beyond the agreed amounts,” it said Thursday.
There have already been demands for some of the huge profits to be used to offset side effects of the central bank’s monetary policy. Trade unionists, for example, want some of the money to be diverted to public old-age insurance.
Banks are also among the critics of negative rates, arguing they hurt their profits. The SNB’s main rate is currently at a record-low -0.75%.
The SNB’s results have no bearing on how it sets policy. What matters is the franc, and officials will be watching recent moves closely. The currency has been strengthening recently, hitting a two-year high against the euro this week due to investor anxiety about U.S.-Iran tensions.
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