"Endgame for Central Bankers" Says Saxo Bank CIO. Also Would Like You To Know They Have Enough Regulatory Capital

First up, Mish's Global Economic Trend Analysis:

Via email, Saxo bank CIO and chief economist Steen Jakobsen declares "Endgame for Central Bankers". He also asks "Why is it that Most People Trust or Bother to Listen to Central Banks?"

Macro Digest: Endgame for Central Bankers
Steen Jakobsen

The SNB suddenly abandoning the CHF ceiling had wide consequences last week as we were all taken by surprise. The fact that it would and should happen eventually was not lost on the market, but the SNB was, as late as last weekend, talking tough and telling the market that the floor was an integral part of Swiss monetary policy. Then suddenly it was not.

I fully understand the rationale for the move (Jakobsen: SNB move is rationality itself) but, like most of the market, I remain extremely disappointed in the SNB’s communication and handling of the issue. But isn’t the bigger lesson or bigger question: Why is it that most people trust or bother to listen to central banks?

Major centrals banks claim to be independent, but they are all ultimately under the control of politicians. Many developed countries have tried to anchor an independent central bank to offset pressure from politicians and that’s well and good in principle until an economy or the effects of a monetary policy decision beginning spinning out of control. At zero bound for growth and for interest rates, politicians and central banks switch to survival mode, where rules are bent or even broken to fit an agenda of buying more time. ...MORE

And via CPI Financial:

Saxo Bank fulfils regulatory capital requirements

In light of the recent volatile Swiss Franc currency movements, Saxo Bank has underlined the security of its financial position. In a statement on the bank;s website, it said, ‘…we would like to inform you that Saxo Bank and its subsidiaries are well positioned financially to conduct our on-going businesses globally’.

Saxo Bank A/S is a European regulated bank and meets the regulatory capital requirements according to European Banking Authority and Danish Financial Services Authority. The capital requirements for regulated banks are higher than those of most brokerages which are not regulated as banks. 

The bank notes that, “A number of Saxo Bank’s customers ended up with insufficient margin collateral to cover their losses on positions in Swiss Franc. Saxo Bank is liaising with these clients to settle such unsecured amounts. It is expected that some customers will not be able to the settle the balance in full and that the bank will incur losses in this respect....MORE