Swiss central bank cut interest rate to half percent

In the face of the worst recession since 1982 the Swiss central bank has decided to cut interest rates to just 0.5 percent.

Rates are now at a four year low, as the central bank announced that further measures may come into play if needed in order to fight off recession.

The Swiss National Bank (SNB) has taken action in order to gradually reduce Libor rates as the Swiss economy has been hit hard by the global economic and financial turmoil.

Thus far the SNB is the first European central bank to be close to reducing benchmark interest rates close to zero.

Although as policy makers are running out of room to further reduce rates they may follow the path of the US Federal Reserve by using different measures in order to stimulate growth.

Across the board the service and financial centre in Zurich has been hit wider than the major banks of UBS and Credit Suisse as new orders for the key metals, machinery and electronics industry.

Credit Suisse, Switzerland’s second biggest bank has only recently announce a 3.0 billion Swiss franc loss for the two months ending in November and further write downs cannot be absorbed.

Swiss Federal Banking Commission and the Federal Department of Finance are said to be monitoring the situation closely.

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