Swiss Bank Books $10B Loss on Lower Gold Price

The Swiss National Bank is warning that a huge drop in the value of its gold holdings will push it to a $10 billion loss, The Wall Street Journal reported.

As quoted in the market news:

The value of the SNB’s gold holdings slid 15 billion Swiss francs ($16.6 billion) in 2013, the Zurich-based central bank said, as the price of the precious metal skidded 28%, its largest drop since 1981. The loss of the gold holdings swamped a gain of roughly 3 billion Swiss francs on foreign currency positions and a profit of 3 billion Swiss francs earned from the sale of a fund that had held troubled assets of UBS AG UBSN.VX +1.11% , leaving it with a loss of 9 billion Swiss francs.

The SNB, one of the world’s biggest holders of gold, said its paper loss would force it to cancel dividends to shareholders for the first time since it was founded in 1907. The central bank also said it wouldn’t be able to make additional payments to Switzerland’s 26 cantons—similar to U.S. states—and the federal government for the first time since 1991.

Read the full Wall Street Journal (subscription required) article here