Gnomes Of Zurich

AAA

DEFINITION of 'Gnomes Of Zurich'

A disparaging term used to describe Swiss bankers. Labor party politician George Brown coined the term in November 1964 during a meeting over the rapidly declining value of the British pound that was part of a currency crisis. British labor ministers were convinced that the foreign exchange speculation activities of Swiss banks were causing the devaluation of the sterling. The term came back into fashion in early 2010 when the global financial crisis created financial instability in Europe.

INVESTOPEDIA EXPLAINS 'Gnomes Of Zurich'

Zurich is the largest city in Switzerland and a major world financial center. Gnomes are mythical creatures that are said to live underground where they guard money. Swiss banks are known for their extreme secrecy, and they historically kept customers' deposits in underground vaults. Thus, the term "Gnomes of Zurich" came to describe Swiss bankers.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Devaluation

    A deliberate downward adjustment to the value of a country's ...
  3. SIX Swiss Exchange

    Switerzland's primary stock exchange, located in Zurich. The ...
  4. UBS

    A multinational diversified financial services company headquartered ...
  5. Foreign Currency Effects

    The gain or loss on foreign investments due to changes in the ...
  6. Currency

    A generally accepted form of money, including coins and paper ...
RELATED FAQS
  1. What are the Gnomes of Zurich?

    The "Gnomes of Zurich" is a euphemism for Swiss bankers. The name is meant as an insult because gnomes, most often found ... Read Full Answer >>
  2. Can small investors buy collateralized mortgage obligations (CMOs)?

    Collateralized mortgage obligations (CMOs), which are pools of mortgage-backed securities (MBS), are available to smaller ... Read Full Answer >>
  3. In what ways does Bayesian probability support the probability default model when ...

    During the European debt crisis, several countries in the Eurozone were faced with high structural deficits, a slowing economy ... Read Full Answer >>
  4. What are the typical day-to-day responsibilities of a Chief Operating Officer (COO)?

    A country's debt crisis affects the world through a loss of investor confidence and systemic financial instability. A country's ... Read Full Answer >>
  5. What incentives are there for a given country to enforce sustainable growth rate ...

    There are strong incentives for a country to expressly support sustainable growth rate (SGR) policies for domestic industry. ... Read Full Answer >>
  6. What is the difference between structural unemployment and cyclical unemployment?

    Structural unemployment and cyclical unemployment occur throughout an economy. Structural unemployment is caused by shifts ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Elves And Gnomes: Fairy Tale Investment Terms

    What do elves have to do with investing? Meet the fairytale creatures running around Wall Street.
  2. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  3. Forex Education

    Currency Exchange: Floating Rate Vs. Fixed Rate

    Baffled by exchange rates? Wonder why some currencies fluctuate while others are pegged? This article has the answers.
  4. Investing

    Market Crisis: Does Diversification Still Work?

    If you still aren’t sold on the benefits of international diversification, you may object that: Diversification didn’t work during the last market crisis.
  5. Forex Education

    What Are IMF Special Drawing Rights?

    Technically, the SDR is neither a currency, nor a claim on the IMF itself.
  6. Forex Fundamentals

    Why The Swiss Franc Is So Strong

    We look at the recent and historic strength of the Swiss franc, as well as recent actions by the Swiss National Bank.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Taxes

    Switzerland's Declining Tax Haven Appeal

    Switzerland's tax haven allure is being threatened by efforts by the US and other governments to make Swiss banks give up their much-vaunted secrecy.
  9. Forex

    Understanding Currency Carry Trade

    A currency carry trade is a long-term investment strategy used primarily by large institutional investors. The purpose is to make a profit over time from differences in interest rates between ...
  10. Investing Basics

    The Dodd-Frank Wall Street Reform Act

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly called Dodd-Frank, was passed in 2010. The goal of the act is to prevent another great recession like that of 2008, which ...

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center