What Prof. Weder di Mauro and Prof. Eichengreen do not consider is, that in case of negative equity of the Swiss National Bank (SNB), the creditors of the SNB, i.e. commercial banks like UBS, CS the Kantonalbanks and other creditors like PostFinance or SUVA (public insurance company) would be obliged to write–down their investments they hold at the SNB.



Therefore negative equity of the SNB may result in bankruptcy of some of the creditors of the SNB, depending on how much credit they had given to the National Bank in order tu buy Euros.



When the SNB introduced the Euro-peg some three years ago, the SNB pretended, that they will finance the Euros just by „printing money“. SNB-President Prof. Thomas Jordan claimed, that in case of negative Equity the Swiss Nationalbank can print money to rise equity up again (see „Braucht die SNB Eigenkapital?“, speech at the Basler Volkswirtschaftlich Statistische Gesellschaft, Basle. p. 13).



Even the Federal Counsil pretended, that the SNB will always be „liquid“ by printing money and therefore never may become insolvent.

In this way the people of Switzerland was misled by the SNB and by the government regarding the financing of the Euro-peg. However, people more and moreunderstood and realized, that the present economic theory is utterly wrong when pretending, that a central bank may issue liquidity by expanding central bank money.



Central bank money is not „liquidity“ of the central bank, as «liquidity » is always an asset. Central bank money, however, is a liability of the central bank. This is the reason, why the SNB had to give up their Euro-peg.



The « Gold-Initiative » had no impact on the decision of the SNB as it was smashed down by 80 percent approx.

