Foreign Banks’ Franc Deposits in Switzerland Fell in MayCatherine Bosley
Deposits of Swiss francs held by foreign banks with Swiss counterparts declined 5.7 percent in May, central bank data published today showed.
Deposits dropped to 103.1 billion francs ($110 billion) from 109.3 billion in April, falling for a third month, according to the Swiss National Bank’s monthly bulletin of banking statistics.
Investors tend to buy the franc at times of high risk aversion, and their anxiety about the euro area’s debt crisis led to demand so strong the franc nearly touched parity with the euro in August 2011. The SNB then set a cap of 1.20 per euro on the franc in September of that year, citing the risk of deflation and recession brought about by the overvalued Swiss currency.
While euro-area unemployment rose to a record 12.2 percent in May, other indicators have signaled the bloc’s economy may recover. Confidence in the currency bloc jumped to the highest level in more than a year in June, a gauge of manufacturing and services output improved for third month and industrial output rose for a third month in April.