Switzerland's central bank officials have just eaten theirwords, risking lingering indigestion in financial markets.

Just three days after Swiss National Bank (SNB) Vice PresidentJean-Pierre Danthine called the franc cap a “pillar” of monetarypolicy, the SNB yesterday dropped the minimum exchange rate of 1.20 per euro.

The shock abandonment of the SNB's primary policy of the pastthree years may now leave investors warier of taking officials'words at face value, according to economists including KarstenJunius, chief economist at Bank J. Safra Sarasin AG in Zurich. Byscrapping one tool, the franc cap, SNB President Thomas Jordanrisks blunting the effects of another.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.