SNB Study Finds Evidence of 1,000-Franc Banknote Hoarding
SNB Study Finds Evidence of 1,000-Franc Banknote Hoarding
(Bloomberg) -- The majority of Switzerland’s high-denomination bills are effectively parked in vaults or stuffed under mattresses, according to a Swiss National Bank working paper.
In a study that has implications for officials at central banks, who must figure out how much below zero they can cut interest rates before the public begins stockpiling cash, the authors calculate that in between 80% and 90% of 1,000-franc ($1,007) notes were hoarded in 2017. For the 200-franc note the proportion was between 30% and 60%.
“Our results indicate that a significant part of large-denomination banknotes is hoarded,” authors Katrin Assenmacher, Franz Seitz, Joern Tenhofen wrote.
The Swiss National Bank unveiled an updated design for its top denomination bill -- one of the world’s most valuable -- earlier this year, in defiance of international calls that the bills aid crime and tax evasion. The European Central Bank has stopped new issuance of its 500-euro note.
A spokeswoman for the SNB declined to comment on the working paper.
To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Zoe Schneeweiss, Brian Swint
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