– This Is How Credit Suisse Informs Clients Their Cash Is No Longer Welcome (ZeroHedge, Dec 3, 2012):
Back in June, the Danish Central Bank set a New Normal precedent by being the first bank to impose NIRP, after it lowered its deposit rates to a negative 0.20% for everyone, in other words anyone wishing to keep cash with the bank would have to pay 20 bps for the privilege. NIRP just moved south to Switzerland, only this time not with a central bank decree: after all the SNB is already engaged in capital controls via the 1.20 EURCHF peg. After all it would seem unsportmanlike if the central bank would admit it needs more currency warfare to halt the influx of CHF into its system, as it would also imply that not only is the Eurozone not fixed, but the exodus of EUR-denominated accounts is relentless, and only the BIS is the marginal buyer of the currency. Instead, Swiss megabank, Credit Suisse, whose assets are orders of magnitude greater than Swiss GDP, in what will be a precedent copied by all other Swiss banks, just imposed negative credit rates on cash clearing balances after December 10 as per the message sent to clients below. In other words, “your CHF-denominated cash is no longer welcome at Credit Suisse, please convert it into that joke of a currency EUR post haste, K thx bye.”
From the bank:
DUE TO CURRENT MARKET SITUATION AND AFTER CLOSELY MONITORING THE SITUATION OVER THE COURSE OF THIS YEAR, WE HAVE DECIDED TO START APPLYING NEGATIVE CREDIT RATES ON CASH CLEARING ACCOUNTS ABOVE A CERTAIN THRESHOLD, AS OF 10 DECEMBER 2012.
CURRENCIES INVOLVED, THRESHOLD AND RATES WILL BE COMMUNICATED ON AN INDIVIDUAL BASIS TO CONCERNED CUSTOMERS DURING THE NEXT 5 BUSINESS DAYS.
WE INVITE OUR CUSTOMERS TO KEEP CASH BALANCES AS LOW AS POSSIBLE TO AVOID NEGATIVE CREDIT CHARGES.
That’s all fine and great but we are confused about one thing: what “current market situation“? Isn’t Europe all sorts of fixed now that US-based hedge funds made a killing by holding Greek debt for 4 months?
Guess not.