ZURICH (Reuters) - Switzerland's central bank could have done more to prepare financial markets for the removal of its franc cap, the Swiss National Bank's vice-chairman at the time told a Swiss newspaper.
The January 2015 announcement that the SNB was ending its policy to cap the franc at 1.20 per euro stunned financial markets, especially as then-SNB Vice-Chairman Jean-Pierre Danthine had said days earlier the minimum exchange rate must remain the cornerstone of the SNB's monetary policy.
"Perhaps one regret: we could have been better at explaining, by insisting more on the temporary nature of the minimum exchange rate or on the fact that no one would be warned," Danthine was quoted as saying by Le Temps in an interview published in Saturday.
"But it's complicated to do that without implying that the end was near. Anything that weakened the minimum exchange rate would come back at us in the form of (currency market) speculation," said Danthine, who since leaving the SNB at the end of June last year has been lecturing at universities.
After the decision to end the minimum exchange rate sent Switzerland's currency soaring, the SNB's policies of negative interest rates and foreign currency purchases have helped stabilize the franc (EURCHF=) at a more tolerable level for exporters.
However, the SNB has still described the currency as significantly overvalued.