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.

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