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It sort of makes sense by my limited understanding. It is quite reasonable that many folks are going to be looking for safe havens and the SF is one traditional haven. Given that, why not drop the peg so as to drop the value of the SF. Then, when money come flooding into SFs, they will go up again, but not as far as they would have without the revaluation. The Swiss stock market only represents the estimate of the value of all of the stocks traded, not the reality, and why should the CB care that much about market valuations, especially when they have good reason to expect them to rise again? Maintaining the value of the stock market index is not likely in their remit. Given the materialization of a large influx of FX into SF, Swill industry will be more competitive than it would be had they done nothing. I could care less what happens to all of the derivatives through this process. Some people will go bankrupt. But they will be financial firms, not domestic industry so much.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jan 19th, 2015 at 12:35:13 AM EST
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