Swiss government gets paid to borrow money

AP News
Posted: May 29, 2012 12:47 PM
Swiss government gets paid to borrow money

Global investors are paying Switzerland to take their money as they look for safe places to park their capital.

The Swiss government issued short-term debt bills worth 688.8 million francs ($716 million) Tuesday at a negative interest rate of 0.62 percent. That means investors are paying to lend money to Switzerland for three months.

Switzerland first offered negative interest on government debt last year when the franc surged on market fears about the euro.

Unicredit economist Alexander Koch says it underscores how investors are willing to incur some losses to preserve capital.

Tuesday's debt sale comes after the Swiss National Bank said Switzerland was preparing for a possible collapse of the euro. SNB president Thomas Jordan told Zurich Newspaper SonntagsZeitung on Sunday that Switzerland was considering introducing cross-border capital controls.