ZURICH, Feb 16 (Reuters) - One of the world’s biggest banknotes - the 1,000-Swiss franc bill - is here to stay, the central bank said on Tuesday, despite consultations over scrapping the European Union’s highest denomination to keep it out of the hands of militants.
European finance ministers last week called on the European Central Bank to look at ways of tightening security around the use of the 500-euro bill, over fears such a high-value note made it easier for terrorists and felons to carry cash.
But a Swiss National Bank (SNB) spokesman said there were no plans to follow Europe’s lead over Switzerland’s bill which is worth $1,014 - almost twice the value of the big euro note and ten times the biggest U.S. denomination, the $100 bill.
The bank’s policy, he added, was that the size of a banknote had no impact on efforts to combat crime.
Few Swiss have seen one of the violet 1,000-franc notes, the latest version of which features the portrait of 19th century cultural historian Jacob Burckhardt.
According to SNB figures, 38.3 billion francs of them were in circulation in 2014, accounting for just under 10 percent of Swiss banknotes but 61 percent of the total value of cash in paper form.
“The high proportion of large denominations indicates that banknotes are used not only as a means of payment but also to a considerable degree as a store of value,” the SNB website says.
Banknote circulation rose to 62.7 billion francs in 2014. “The increased demand for banknotes is due to the persistently low level of interest rates. The greater demand for small-denomination notes mainly reflects positive developments in private consumption,” the latest SNB annual report says.
One Swiss banking source said they had seen recent signs of people hoarding 1,000-franc notes as a reaction to negative Swiss interest rates that make banks and large institutional investors pay for some deposits
The SNB has said it has no data to confirm this. (Reporting by Michael Shields in Zurich and Patrick Graham in London)
Our Standards: The Thomson Reuters Trust Principles.