Bardonomics

Image: 123rf Two months ago, the Swiss National Bank (SNB) unexpectedly abandoned the Swiss Franc’s exchange-rate peg to the Euro. The move rocked financial markets, and the value of the Swissie, as the Franc is known, soared the most in its trading history. The Economist quoted an analyst describing the Franc’s dizzying rise as a “20-plus-standard-deviation move,” something that should only happen once in “many squillions of years.” The decision by the SNB to remove the peg was unwise. Its ramifications will, and are, being felt by the Swiss economy. In 2011, as the European debt crisis deepened, the SNB implemented a currency peg, tying the Franc’s value to that of the Euro. This was because the Swiss currency, seen as secure, saw massive inflows from investors searching for a “safe haven.” As Euros were sold and Francs were bought, the latter’s value rose dramatically. Switzerland, dependent on exports for some 70% of GDP, saw its competitiveness decrease. Due to the st