Switzerland’s central bank lowered its key interest for a fifth straight meeting of its policy makers, while its Swedish counterpart left rates unchanged Thursday for the first time since mid-2024, the Wall Street Journal reported. Economists expect both central banks to leave their key rates unchanged over coming months. Both have moved rapidly to remove the restraints they placed on economic activity as they sought to tame an inflation surge in 2022 and 2023.
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Switzerland
Weaknesses in the capital regime for the Swiss banking sector still need to be addressed after the 2023 collapse of Credit Suisse, the Swiss National Bank said on Tuesday, backing government efforts to make the industry more robust, Reuters reported. Switzerland has pledged to introduce stricter banking regulations in response to the demise of Credit Suisse, which was subsequently taken over by its old rival UBS. At the centre of proposals set out by the government last year is that UBS should hold more capital to make it more robust and prevent a repeat of the Credit Suisse meltdown.
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Switzerland’s inflation rate edged down in the final month of 2024, reinforcing the Swiss central bank’s decision to cut its key rate for the fourth-straight meeting last month, the Wall Street Journal reported. Consumer prices were 0.6% higher in December than the same month of 2023, down from the annual inflation rate of 0.7% posted in November, the country’s statistics agency said Tuesday. December’s rate was the same as October’s level, which was the lowest since June 2021.
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The Swiss National Bank cut its interest rate by 50 basis points on Thursday, its biggest reduction in almost 10 years, responding to weaker than expected inflation in Switzerland and growing uncertainty about the global economy, Reuters reported. The central bank flagged tepid price increases, rising risks around future U.S. economic policy and political hazards in Europe as it reduced its policy rate from 1.0% to 0.5%, the lowest since November 2022.
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Switzerland's financial regulator said on Wednesday it would regularly review how it oversees UBS as the country's authorities prepare to overhaul regulations to make the banking sector more robust, Reuters reported. Laying out its strategic goals for 2025 to 2028, FINMA said it would enhance supervision of institutions it watches and have them develop their governance and risk culture towards higher requirements and clear risk tolerance thresholds.
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Swiss solar panel maker Meyer Burger Technology AG said its ability to continue operating cannot be assured given its indebtedness and cash burn, underscoring the industry’s troubles as cheaper Chinese modules flood the market, the Wall Street Journal reported. The company saw sales halve in the first six months of 2024 compared to a year earlier, while generating a loss of CHF123.5 million ($142 million) in terms of earnings before interest, taxes, depreciation and amortization.
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