Swiss National Bank May Have to Sell Some of Its $100 Billion in U.S. Stocks
(Bloomberg) - The Swiss National Bank could be forced to sell part of its US $ 100 billion equity portfolio to ban investment in defense companies.
A survey by gfs.bern for the public broadcaster SRG on Friday showed that 54% of voters are in favor of the proposal, which will be submitted to a national vote on November 29th.
Such an outcome would prohibit the central bank or pension fund from raising funding to a company that generates more than 5% of arms sales revenue. The SNB estimates that it would have to sell stakes in 300 companies that together are worth 11% of the value of its portfolio of global stocks.
Although few details are available on each of its holdings, U.S. disclosure forms show that in June the company owned $ 369 million in Tomahawk cruise missile maker Raytheon Co, while it owned Boeing Co., the The manufacturer of the B-52 bomber was involved, valued at 388 million US dollars.
The campaign is the latest attack on the independent central bank, which has been asked over the years to pay more money to the government, part with fossil fuel producers, and even change the way it provides money to the economy .
While the SNB is already excluding companies that manufacture internationally condemned weapons such as anti-personnel mines from its stocks, the exclusion of more and more companies could jeopardize the market neutrality of their investments and make policy-making more difficult.
Swiss commodity traders in arms above foreign liability requirements
Since the SNB's investments, which arose from its foreign exchange interventions to weaken the Swiss franc, are intended to support its political goals, it tries to reflect indices and does not actively select stocks.
Proponents of the initiative proposed by antiwar activists say it will help ensure that public funds are not used in harmful ways. The government, however, opposes the move, saying it won't do much to stop gun manufacturers and will make life difficult for pension funds, which are already facing low returns.
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