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It was bad form for the SNB to say they were committed to the peg and then to scrap it a few days later. On the other hand it shows how entitled markets have be
by marcusgarvey 12y ago
It was bad form for the SNB to say they were committed to the peg and then to scrap it a few days later. On the other hand it shows how entitled markets have become to having central banks telegraph their strategy to the world. Would monetary policy & markets ultimately work better if we didn't expect central banks to be so blatant about their future moves? At the very least it would shake out the dangerous complacency that leads to overcrowded trades & heightened contagion risk.
- deleted 12y ago[deleted]
- paganel 12y ago> It was bad form for the SNB to say they were committed to the peg and then to scrap it a few days later. I may be wrong, but I think the decision to get rid of the cap was ultimately the result of an ECJ's judge statement made the previous day: http://www.telegraph.co.uk/finance/economics/11344253/ECJ-ruling-paves-way-for-eurozone-QE.html http://www.telegraph.co.uk/finance/economics/11344253/ECJ-ru... , so not much that SNB could do about it.
- conistonwater 12y agoBut that decision was about ECB's QE, I don't think this is as clear as you make it sound. SNB could have chosen to continue the peg through any ECB actions, but instead they chose to scrap it. It was still their decision, although you can argue that they wouldn't have been successful had they decided to continue the peg.