Minimum Exchange Rate for CHF Discontinued | Currency Futures


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Minimum Exchange Rate for CHF Discontinued

  #37 (permalink)

the congo
 
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LittleJohn View Post
The following is a passsage from the SNB's mandate. Seems to me they may have not adhered to their state aim of price stability.

The SNB conducts the country’s monetary policy as an independent
central bank. Its mandate is to conduct monetary policy in such
a way that money preserves its value and the economy develops
favourably. This mandate is enshrined in the Constitution and
the National Bank Act (NBA). The Constitution (art. 99) obliges
the SNB, as an independent central bank, to conduct a monetary
policy that serves the interests of the country as a whole. The NBA
(art. 5 para. 1) describes the SNB’s mandate in more detail: “It
shall ensure price stability. In so doing, it shall take due account
of the development of the economy.”
A well-organised, stable monetary system is an important prerequisite
for a prosperous economy. With the emergence of nation states, the
creation of money and the organisation of the monetary system were,
as a rule, assigned to a public institution, i.e. the central bank.
The central banks’ origins vary from one country to another. Some
of the oldest central banks were originally state banks which granted
loans to the state and managed state assets. Others were set up
to enhance the stability of the banking system and to counteract the
frequent bank panics.


If retail traders and companies have been burnt the the big boy's pension/hedge funds will be in the same boat and the class actions are sure toi follow, In my view this one has a long way to run. If court cases go against the SNB then it may well have been cheaper for them to defend the 1.20.

Anybody have any views.

No chance. Those wiped out and this includes brokers only have themselves to blame. Pure greed on their part. Most reputable brokers changed the margin requirements some time ago for chf pairs. This was rumoured in the industry in the run up to the news.

The lack of liquidity could have caused issues if you were trading at the point of the spike on both sides. FAT TAILS posted a chart showing a breakout from a channel of some kind. If you had a limit order to capture that breakout you would have been filled 1400 pips away from your order. If it had a bracket limit for take profit from your original entry say 200 pips away that too would have been instantly executed leaving you 1200 pips in the hole. This happened to several traders who with 100k accounts taking advantage of leverage lost millions! Forex can be a dangerous game! Buyer beware!

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