Swiss National Bank Ponders Capital Controls

Swiss National Bank (SNBN) President Thomas Jordan said controls on capital inflows are among measures being considered by a government-led panel to stop the franc from strengthening if the euro-area debt crisis escalates.
“The working group focuses mainly on instruments to combat the franc strength based on a joint approach of the government and the central bank,” Jordan told the SonntagsZeitung newspaper in an interview published yesterday. “We also need to be prepared for the possibility of the currency union collapsing, even though I don’t expect it.” SNB spokesman Walter Meier confirmed Jordan’s remarks to the newspaper.

Any capital controls would follow the SNB’s efforts to stem franc gains by purchasing euros in the 15 months through June 2010. As the euro crisis worsened last year, prompting investors to pile into currency, Swiss policy makers imposed a ceiling of 1.20 versus the euro to protect the economy, using the measure for the first time since the 1970s.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza