The emergency sale of Credit Suisse to UBS is damaging the national currency.
(Photo: Bloomberg)
Frankfurt The banking drama in Switzerland is damaging the reputation of the Swiss franc and depressing its rate. The Swiss franc lost almost 1.4 percent against the euro last week. The two currencies were just below par as of midday on Wednesday.
The Swiss currency was previously considered a safe haven by many, but now it is no longer associated only with stability and strength – but also with the banking crisis. “As a result, the safe haven of Franconia is suffering, at least in the short term,” says Karsten Junius, chief economist at the Swiss private bank J. Safra Sarasin. The markets have lost some confidence in the financial center.
According to Junius, there is a risk that the franc could be infected by the uncertainty that has prevailed in the capital markets in the past few days. Other market experts, on the other hand, are more optimistic. Important decisions by the Swiss National Bank (SNB) that are likely to affect the currency are imminent.
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