Understanding the SNB surrender

[Jack o'Clubs]

Reading the professional commentary on this over the weekend and this morning (ie not journos or bloggers), while there's criticism of the policy (including whether the CHF should have had a limit set in the first place), there was no criticism of the way that it was communicated, because a small open economy like Switzerland would have been annihilated by the Soros's of this world had they tried a more graduated approach. Shock and awe was the only way to stop the big macro funds from wiping the SNB out. Also bear in mind the SNB's unique shareholding structure (owned by the cantons) makes it very sensitive to balance sheet gearing and losses.

 

[Atilla]

Not simply the small boys who got fried...

http://www.bloomberg.com/news/2015-01-19/bank-losses-from-snb-surprise-seen-mounting.html

I'm sure few more will crawl out from some rock sooner or later as article predicts.

 

[FrieFrench]

Who moved my cheese? – The Swiss Franc debacle

The Swiss National Bank’s surprise decision on Thursday caused the franc to surge against the euro and dollar, sending shockwaves through the global financial system. The euro suffered its biggest-ever one-day fall against the franc on Thursday, dropping more than 18 percent, after the SNB stunned markets by scrapping its three-year-old pledge to limit the franc’s value to 1.20 per euro.

On Thursday its value had fallen to just 0.85 francs. A number of hedge funds across the world made big losses. The Swiss stock markets plunged by more than 10% after the announcement. Why did the SNB provoke such chaos?

Via Who moved my cheese? – The Swiss Franc debacle

 

[Atilla]

http://www.bloomberg.com/news/2015-...rs-from-shock-revaluation-of-swiss-franc.html

 

[counter_violent]

Looks like cmc are on the hook....others may also be taken to task.

http://news.forexlive.com/!/cmc-markets-told-to-refund-thousands-on-snb-trades-20151021

 

[tomorton]

Good news. I'm actually surprised at the speed of the ombudsman's conclusions.