Swiss National Bank Ponders Capital Controls

Swiss National Bank (SNBN) President Thomas Jordan said controls on capital inflows are among measures being considered by a government-led panel to stop the franc from strengthening if the euro-area debt crisis escalates.
“The working group focuses mainly on instruments to combat the franc strength based on a joint approach of the government and the central bank,” Jordan told the SonntagsZeitung newspaper in an interview published yesterday. “We also need to be prepared for the possibility of the currency union collapsing, even though I don’t expect it.” SNB spokesman Walter Meier confirmed Jordan’s remarks to the newspaper.

Any capital controls would follow the SNB’s efforts to stem franc gains by purchasing euros in the 15 months through June 2010. As the euro crisis worsened last year, prompting investors to pile into currency, Swiss policy makers imposed a ceiling of 1.20 versus the euro to protect the economy, using the measure for the first time since the 1970s.

via Bloomberg

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