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Swiss Bank Chief Defends Policy Change on Currency

  • VOA News

A couple of 100 franc bank notes are pulled from an ATM in Kreuzlingen, Switzerland.

A couple of 100 franc bank notes are pulled from an ATM in Kreuzlingen, Switzerland.

The director of the Swiss National Bank has defended a decision to allow the value of the Swiss currency to float freely against the euro.

Thomas Jordan said in an interview published Friday in Le Temps and Neue Zurcher Zeitung that bank officials knew ending the fixed exchange rate might affect financial markets, but that the change was necessary to keep control of the country's long-term monetary policy.

He said the cap price was designed as a temporary measure when it was implemented in September 2011.

The surprise move Thursday sent the value of the Swiss franc up 30 percent against the euro.

Some financial institutions experienced large trading losses as a result of the Swiss bank's decision.

The Wall Street Journal reported Citigroup Inc. and Deutsche Bank AG each suffered losses of $150 million.

Analysts said the largest victim appeared to be a major U.S. retail foreign exchange broker, FXCM Inc. The company lost $225 million.

Jordan said telegraphing the Swiss bank's intention was impossible because it would have opened the door for speculators.

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