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Sunday 26 January 2020

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Swiss asset managers think negative interest rates will last until 2022

Written by Natalie Tuck
29/11/19

The Swiss asset management industry believes that negative interest rates, which is having a detrimental impact on pension funds, are likely to last until 2022.

The Swiss Funds and Asset Management Association’s latest asset management survey found that many believes the timetable for abolishing negative interest rates will be extended far into the future.

Almost all of them (97 per cent) think that negative rates will be abolished in 2022 at the earliest. The figure in the spring survey was comparatively low at 45 per cent.

“The phase of negative interest rates that has persisted for years in Switzerland, having a detrimental effect on savers, pension funds and the financial sector as a whole, thus looks likely to continue for some time yet,” the report noted.

However, around 60 per cent of the asset managers surveyed view the current monetary policy of the Swiss National Bank (SNB) as appropriate. The proportion favouring a more restrictive stance has decreased compared with the spring, whereas support for further easing has increased slightly.

Almost all asset managers expect that negative interest rates will not be abolished before 2022. Just one single respondent thinks that the Swiss franc is currently undervalued, with exactly half of the rest seeing it as fairly valued and half as overvalued.

In addition, asset management experts believe that geopolitical uncertainty has grown significantly and is increasingly weighing on the Swiss economy, the biggest threat to which remains the economic downturn that is taking shape internationally.



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