CHF now looks to ‘Vollgeld’ – Danske Bank

Jakob Christensen, Senior Analyst at Danske Bank, gives his views on the upcoming referendum in Switzerland and CHF.

Key Quotes

“The 10 June Swiss referendum on ‘Vollgeld’ (i.e. sovereign money) has so far moved under the radar”.

“Recent polls suggest a majority moving in favour of a ‘no’ to the initiative, but we stress that the sheer scale of the initiative, which essentially entails ending the fractional reserve banking system, means it is worth keeping an eye on”.

“In case of a ‘yes’, it would have wide-ranging implications for the Swiss economy and be likely to postpone SNB ‘policy normalisation’, i.e. be CHF negative. Even more importantly, a ‘yes’ could spark a renewed push for a similar move elsewhere in Europe”.