5. Bloated SNB Balance Sheet

The SNB's governors never tire of pointing out that its rate regime is working to dissuade from Swiss franc deposits, but the measure has done little to sustainably weaken the franc. The most obvious side effect for the central bank? A painfully bloated balance sheet that stood at 837 billion at the end of last year – a whopping 276 billion francs more than when it lifted the cap in January 2015. 

The SNB faces the sobering realization that its balance sheet has actually swollen more sharply in the past three years than when it formally defended the franc against the euro. In short, negative interest rates have bloated the SNB – a painful side effect for the desired effect.

6. Rapture for Alternative Investments 

Negative rates from the SNB and from the European Central Bank have weighed bond yields close to zero or even into negative territory – a huge conundrum for institutional investors, which rely heavily on treasuries for returns.

This has made way for a wave of alternative investments promising higher returns than buying bonds. Private equity specialists like Zug-based Partners Group are experiencing the gilded age of alternative investments, while asset management competitors play catch up in terms of expertise. Besides private equity, investors have fled for real estate or private debt funds – looking for higher returns, at the expense of risks such as portfolio illiquidity.