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Jan Schwalbe, Bloomberg, on the Swiss National Bank

Jan 15, 2015|

Jan Schwalbe, Bloomberg, on the Swiss National Bank by The Financial Exchange

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And we are now going to turn to really what one of the major stories that is breaking today in this is what is happening in Switzerland and here to join us. We have John and John I'm sorry I'm not gonna be ought to pronounce her last name correctly how how do you actually say it. It and it's it's out of that you and they were like you're and they know what that. Settlers. I'm gonna Oregon it's so the next time we have beyond I'll be able to say it but I got your you're joining us from Bloomberg and what exactly has happened overnight in Switzerland here. Well written an epic currency pact Euro kind of to protect the strength from getting too strong and hurting explores. And all the time that work is pressure mounting that this national bank because that hack what kind of a natural thing. To kind of remove the pack. To date they remove that. Well kind of a pardon me at all hell broke lose interest trying to strengthen the Euro is on parity. During and compare to the dollar and then. Our market went down considerably. And but it it's been that they let me tell you. What was there any warning of this from the Swiss Central Bank it all mean this it seemed like there was no talk of this. And it came out of nowhere. It really came out of nowhere only a few days ago the First National Bank re confirmed that they will. Fight or protect the hack at all cup. Of course they at what they had to do and the hats you try it. But the market reaction to date look look look incredible I talked to. You expect that nobody expected that we ought to bankers analysts. Everybody about the size. Yeah and in I've spoken to a couple of folks over in London that said. That you're seeing hedge funds and banks that have taken. Nine figure losses essentially because they were not hedged for this type of move it seems like this is going to have a major effect. On European financials correct. Totally banks where one of the bigger loop today. Nobody expected it and they did last at all about the money today because that look at what level certainty in the market and that what the pact in Europe. But everybody was saying but that the only thing is that they're. Been a bite and suddenly the pact was broken. And the grip strength increased in value and that hurt a lot of people especially the financial. Also like oh yeah export oriented companies and learn. And then it it didn't it well if you want to call. Unheard of the unheard of youngest European Union have any kind of recourse here. Well. But they don't have a record then I pulled the suspect then and that's just. My personal opinion and it have to be like that that's the First National Bank talk to the European Central Bank about a four. Property over the that it didn't do it just. On their own. And that's how the national bank should work. And but let me every but he outplayed the national bank but very much but they're a record. So what where when you look at this. What are some of the reasons why the Swiss would've wanted to do this it seemed like again this is something that. Very clearly. Causes some major problems in Switzerland what what exactly is the rationale behind this. Well yeah I get is that you've been absolutely because it kind of been not a natural. Measure compact currencies especially in a functioning. Economy like we're in it and it is the countries that do that are. Emerging market country they would act the current and older are well who get the ability to their market. The country a little normally doesn't do that. But with a appreciate in Belmont that it became problem portrait export. Okay and but the pact and the fact that the industry. Could be competitive internationally. But it looked always kind of the year. Eventually down the line they had to get rid of the hat. Nobody expected that to be two days people work and then. Contemplating maybe in a year or two when the fifth ranked financial. Packed scenes straight up or thank. With the around the 120 let that people pack level anyway but. Within seconds. Franc appreciated by about Annika and but they'll round he level and then if it apt to be seeing maybe recruit who wrote. To really see the effect. Maybe it going back up to rip you would be put at the moment we go Rita and indicates that that that the that the whole thing work. All right well John I appreciate all the employer certainly. Something that I think all of us woke up to today and were pretty surprised by but thank you again for all the information and will certainly be chatting with you in the futures well. Fantastic spectacle last year.