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‘There would have been ample opportunity for an orderly exit’

Professor Michael Hanke, co-author of a study on the euro / Swiss franc exchange rate, comments on the abandonment of the minimum rate by the Swiss National Bank (SNB).



Professor Michael Hanke, co-author of a study on the euro / Swiss franc exchange rate, comments on the abandonment of the minimum rate by the Swiss National Bank (SNB).




‘The ending of the SNB’s minimum exchange rate policy at a time when the intervention level of 1.20 has been repeatedly tested by market participants is a clear signal that the SNB did not plan to lift the policy now. Abandoning the policy several months ago, at exchange rates of 1.22 and above, would have caused much less turbulence on the financial markets. Tying the Swiss franc to a basket of currencies instead, as suggested by some observers, offers some advantages in theory, but would have been far more difficult to put across to the public.’

Professor Michael Hanke, holder of the Chair in Finance at the University of Liechtenstein


What would have happened to the euro / Swiss franc exchange rate if the Swiss National Bank had not intervened in the year 2011, when the upward revaluation of the Swiss franc in relation to the euro threatened to cause serious problems for Swiss industry? This question is investigated in a study by the University of Liechtenstein, the University of  Copenhagen and the Technical University of Denmark, published in February 2014. Professor Michael Hanke was one of the co-authors.