Former Credit Suisse CEO calls negative rates ‘crazy’

Bloomberg

Oswald Gruebel, who led both of Switzerland’s two biggest banks during his career, criticised negative interest rates and argued they’d lead to a further decline of the country’s financial sector.
“Negative interest rates are crazy. That means money is not worth anything anymore,” Gruebel said in an interview with Swiss newspaper NZZ am Sonntag. “As long as we have negative interest rates, the financial industry will continue to shrink.”
Gruebel served as Credit Suisse CEO from 2004 to 2007 and as UBS Group AG’s top executive from 2009
to 2011.
The Swiss National Bank has used negative interest rates since 2015 to rein in an appreciation of the
franc, arguing the policy — together with a pledge to intervene in currency markets — is crucial to protect the economy.
Yet banks are suffering. Credit Suisse plans to impose charges on more wealthy clients as it prepares to spread the pain of subzero rates, Bloomberg News reported in September.
Policy makers are aware of the burden. At their last meeting in September, they decided to offer banks additional relief by exempting a larger amount of their deposits from the charge. The move was seen as giving the SNB some leeway to cut rates further if needed.
In the interview, Gruebel also addressed the spying scandal that has rocked the Swiss financial sector. He previously called for current Credit Suisse CEO Tidjane Thiam to step down over a decision to hire private detectives to trail the former head of wealth management Iqbal Khan as he was about to defect to UBS.