The Swiss Franc Shock: How the SNB Broke Its Own Currency Floor

Key Takeaways

• The SNB discontinued its CHF 1.20 per euro floor on January 15, 2015, exactly four weeks after a December 18, 2014 press release that reaffirmed the same floor and promised to enforce it "with the utmost determination."
• Using Federal Reserve H.10 exchange rate data, the implied CHF-per-EUR rate fell from 1.2009 on January 14, 2015 to 1.0357 at the close on January 15 and 0.9776 at the close on January 16, a two-day decline of roughly 19% in the number of francs one euro would buy.
• The SNB simultaneously cut the rate on sight deposit balances by 0.5 percentage points to -0.75% and widened its three-month Libor target range to between -1.25% and -0.25%, its own press release framing this as an offset against an otherwise inappropriate tightening of monetary conditions.
• The Swiss Market Index fell about 8.7% on January 15, 2015, its worst single session since the late 1980s by percentage terms, after trading as low as 7,932.23 intraday against a January 14 close of 9,198.20.
• FXCM Inc., a NYSE-listed retail forex broker, disclosed in an SEC filing that clients owed it approximately $225 million in negative equity balances, and arranged a $300 million two-year loan from Leucadia National Corporation at an initial rate of 10% a year to stay within regulatory capital requirements.
• The SNB's own balance sheet data show foreign currency investments roughly doubling from about CHF 203.8 billion at the end of 2010 to about CHF 510.1 billion at the end of 2014, the visible cost of defending the floor by buying foreign currency.
• Seven days after the SNB's move, on January 22, 2015, the European Central Bank announced a €60 billion-per-month asset purchase programme intended to run until at least September 2016, the specific policy divergence the SNB's own statement cited as the reason the floor was "no longer justified."

Why Did the SNB Peg the Franc at 1.20 per Euro in 2011?

The floor did not begin as a currency-market curiosity. It began as an emergency measure against what the SNB itself called an existential threat to the Swiss economy. In a press release dated September 6, 2011, the SNB stated plainly that "the current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development," and announced that "with immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20." The SNB said it would enforce the rate "with the utmost determination" and was "prepared to buy foreign currency in unlimited quantities."

The overvaluation the SNB was reacting to had a specific cause. Switzerland sits next to a currency union that spent 2010 and 2011 in an escalating sovereign debt crisis, documented in the European sovereign debt crisis. Investors moved capital into francs as a safe haven with no reference to Swiss economic fundamentals, and the currency appreciated far beyond what Swiss exporters, tourism operators, and import-competing businesses could absorb. A small, open economy running a large current account surplus does not have many tools to stop that kind of appreciation once foreign capital decides its currency is the safest place to sit out a crisis. A one-sided floor, an explicit level below which the central bank promises to buy unlimited foreign currency, was the SNB's chosen tool.

It is worth being precise about what kind of commitment that is. A one-sided floor is asymmetric by design: the central bank can defend it forever against appreciation pressure, because it can create francs without limit to buy foreign currency. It cannot defend the same floor forever against depreciation pressure, because its foreign currency reserves are finite. In 2011 the pressure ran entirely one way, toward appreciation, so the asymmetry favored the SNB. That asymmetry is also why the floor could be enforced credibly for more than three years: the SNB never had to test the side of the promise it could not actually keep indefinitely.

Why Did the SNB Reaffirm the Floor on December 18, Then Abandon It Four Weeks Later?

This is the detail that turns a currency-mechanics story into a lesson about central bank credibility, and it is documented in the SNB's own press releases rather than in any secondhand account.

On December 18, 2014, the SNB announced it was introducing negative interest rates, charging -0.25% on sight deposit account balances above a threshold, with the explicit purpose of making it less attractive to hold franc investments. The same press release stated: "The SNB reaffirms its commitment to the minimum exchange rate of CHF 1.20 per euro, and will continue to enforce it with the utmost determination. It remains the key instrument to avoid an undesirable tightening of monetary conditions resulting from a Swiss franc appreciation... The SNB is prepared to purchase foreign currency in unlimited quantities and to take further measures, if required."

Twenty-eight days. That is the distance between a central bank stating, in writing, that it will defend a commitment "with the utmost determination" and the same central bank discontinuing that commitment entirely. The negative interest rate introduced on December 18 was itself described as a tool to support the floor, not to replace it. Four weeks later, the floor was gone and the new tool remained, deepened from -0.25% to -0.75%.

Economists have a name for the general problem this illustrates: time inconsistency, the idea that a policy which is optimal to announce today can become suboptimal to actually carry out once the announcement has done its work and circumstances change. It is not evidence that the SNB was dishonest in December. It is evidence that a central bank's forward-looking language describes its intention at the moment it is spoken, not a binding constraint on its future decisions, however forcefully that language is worded. The December 18 statement was true when it was written. It stopped being true by January 15, and nothing about the wording of the December statement could have told a reader when that would happen.

There is a narrower, more Switzerland-specific reason this particular reversal came so fast. The negative interest rate introduced on December 18 was meant to make holding francs less attractive and reduce the pressure the SNB had to absorb through intervention. It bought time, not a solution. Over the following weeks, evidence accumulated that the underlying pressure, driven by what was coming from the eurozone, was too large for a quarter-point rate cut to offset, which is the subject of the next two sections.

What Exactly Did the SNB Announce on January 15, 2015?

The January 15, 2015 press release is short, and its brevity is itself informative: there was no phased transition, no interim band, and no advance notice to markets. It has three components.

The floor was discontinued outright. The SNB stated it "is discontinuing the minimum exchange rate of CHF 1.20 per euro," full stop, with no replacement level announced.

The policy rate was cut and the negative-rate mechanism deepened. The SNB lowered the interest rate on sight deposit account balances above the exemption threshold by 0.5 percentage points, to -0.75%, and moved the target range for the three-month Libor to between -1.25% and -0.25%, from the previous range of -0.75% to 0.25% set less than a month earlier.

The stated reasoning pointed at the dollar, not just the euro. The press release said that "the euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar," and that "in these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified." That sentence is doing more work than it first appears to. The floor was defined against the euro alone. If the euro was falling against the dollar for reasons unrelated to Switzerland, the floor's designers had built the franc's dollar value on the back of a currency that was itself weakening, dragging the franc down against the dollar even while the SNB held it flat against the euro. Continuing to defend a euro-only floor in that environment meant accepting an increasingly large and increasingly one-way bet against a currency area whose own central bank was about to expand its balance sheet aggressively, discussed in more detail below.

The press release also explained the rate cut's purpose directly: "The SNB is lowering interest rates significantly to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions." Removing a floor that had been holding the franc down is, mechanically, a tightening event, since a stronger currency makes imported goods cheaper and Swiss-made goods more expensive abroad, both of which push against inflation. Cutting rates on the same morning was the SNB's attempt to lean against that effect using the one lever still available to it.

How Far and How Fast Did the Franc Move?

The cleanest way to measure the move without relying on secondhand trading-desk anecdotes is to use the Federal Reserve's own H.10 foreign exchange release, which reports a daily New York snapshot for both the Swiss franc and the euro against the US dollar. Multiplying the two together gives an implied CHF-per-EUR cross rate, since neither the Fed nor most public data providers publish a direct daily CHF/EUR series.

Daily rates from the Federal Reserve's H.10 release (Series DEXSZUS and DEXUSEU). The CHF-per-EUR column is calculated by multiplying the two published rates; it is not a directly quoted market rate and can differ from a live EUR/CHF quote at the same moment.

Read the first three rows before the rest. On 12, 13, and 14 January the implied cross rate sits at exactly 1.2009 in this data, essentially glued to the floor, which is exactly what over three years of "utmost determination" should look like. Then it breaks. By the January 15 close the implied CHF-per-EUR rate had fallen about 13.8% below the old floor level; by the January 16 close it was about 18.6% below. Against the dollar directly, the CHF-per-USD rate fell by roughly 12.2% on January 15 alone and roughly 16.6% across the two sessions, using the same close-to-close method. A note on precision: a falling exchange rate and the currency's own appreciation are not quite the same percentage, since one is the reciprocal of the other. The figures above describe the rate itself, which is what the table shows; on a purchasing-power basis, one franc's ability to buy euros rose by somewhat more than these numbers, since a smaller reciprocal denominator always produces a larger percentage increase than the matching percentage decline in the original rate.

Two caveats matter for a reader trying to use these numbers responsibly. First, these are single daily snapshots from an official US government data release, not a continuous intraday series, so they cannot show the path the exchange rate actually took during the trading day. What is well documented, including in the loss disclosures covered in the next section, is that the intraday range on January 15 was substantially wider than the close-to-close numbers above, and that for a period after the announcement many market makers either stopped quoting continuously or widened spreads to the point that a "market rate" in the normal sense did not exist. Second, the CHF-per-EUR figure in the table is calculated, not directly quoted, so it will not exactly match a live EUR/CHF trading screen from the same moment; it is presented here because it is fully reproducible from a single primary source rather than from a secondary aggregator.

A currency moving roughly 15% to 20% against a peer currency in two trading sessions is a genuinely unusual event among developed-market exchange rates. It is the kind of move more commonly associated with an emerging-market devaluation, discussed for a different mechanism in the Argentina 2001 default, than with a G10 currency pair that had spent years trading in a tight, policy-defended band.

Which Retail FX Brokers Failed, and What Actually Broke Them?

Retail foreign exchange brokers extend leverage to clients who trade currency pairs on margin, meaning a client can hold a position several times larger than the cash they have posted. The broker's normal defense against a client's position moving against them is a stop-out rule: if losses eat into the client's margin past a set threshold, the broker's system automatically closes the position before the client's account can go negative.

That defense assumes the market can actually execute the closing trade at, or close to, the price the system expects. On January 15, 2015, for a period after the SNB's announcement, that assumption failed. The franc moved so far, so fast, that many brokers could not find a counterparty willing to fill client stop-out orders anywhere near the levels those systems were built around. Positions that should have closed with a bounded loss instead closed, if they closed at all, deep enough underwater that clients owed their brokers money rather than the reverse. A broker that has promised clients they can never lose more than they deposited is then absorbing the difference itself.

FXCM Inc., at the time a NYSE-listed provider of online forex trading, is the clearest documented example, because as a US public company it was required to disclose the damage. In an SEC filing dated January 15, 2015, FXCM stated: "due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to FXCM of approximately $225 million... As result of these debit balances, the company may be in breach of some regulatory capital requirements."

The firm did not wait for a slow resolution. A follow-up SEC filing dated January 20, 2015 detailed that FXCM Holdings, LLC and a newly formed subsidiary had entered a credit agreement with Leucadia National Corporation on January 16 for a $300 million, two-year term loan, with net proceeds of approximately $279 million earmarked to replace the capital shortfall and pay down other debt. The pricing reflected how urgent the situation was: an initial interest rate of 10% per year, rising by 1.5 percentage points every quarter the loan remained outstanding, capped at 17%. That schedule is a lender's way of pricing in both the borrower's distress and its own incentive to be repaid quickly rather than to collect interest indefinitely.

FXCM's disclosure is unusually well documented because SEC filing requirements forced it into the open, but the underlying mechanism, an automated stop-out system that assumes a liquid two-sided market and meets a moment when that assumption fails, was not specific to one firm. Other retail foreign exchange brokers around the world also failed or were forced into insolvency in the days that followed the announcement, for the same structural reason: the client-facing promise of bounded losses depends on the broker's own ability to close a losing position in the live market, and on January 15, 2015 that ability briefly disappeared.

The lesson is about the promise, not the firm. "Your losses cannot exceed your deposit" is a promise about normal market conditions. It says nothing about what happens when liquidity vanishes entirely for several minutes, because in that scenario the broker cannot fulfill the promise even if it wants to. The gap is either absorbed by the client, through negative equity, or by the broker, through a capital shortfall like FXCM's. It rarely disappears on its own.

What Happened to the SNB's Own Balance Sheet?

Defending a floor is not free for the central bank enforcing it. To keep the franc from appreciating past CHF 1.20 per euro, the SNB had to buy foreign currency, mostly euros, whenever market demand for francs threatened to push the exchange rate through the floor, paying for those purchases by creating francs. The purchased foreign currency then sits on the SNB's own balance sheet as an asset. The SNB's published balance sheet data, available through its data portal, makes the scale of that activity visible.

SNB balance sheet, selected year-end levels, in billions of Swiss francs, from the SNB's own published balance sheet data (cube snbbipo).

Total assets roughly doubled between the end of 2010 and the end of 2014, most of the increase concentrated in foreign currency investments, exactly what a floor defended through unlimited currency purchases should produce. The path was not a smooth upward line, and that irregularity is itself informative. Total assets actually fell slightly between the end of 2012 and the end of 2013, a year when the immediate pressure on the eurozone had eased somewhat and the SNB needed to intervene less. The pressure then resumed and intensified through 2014, the year the European Central Bank was moving visibly toward large-scale asset purchases of its own, discussed in the next section but one.

This is the balance-sheet mechanism behind the December-to-January reversal covered earlier. A floor backed by "unlimited" purchases is unlimited in the sense that the SNB can always create more francs; it is not unlimited in the sense that an ever-larger foreign currency position carries no risk. As the reserve grew, so did the SNB's own exposure to a franc that might one day be allowed to strengthen, since a stronger franc makes euro-denominated reserves worth fewer francs in the SNB's own accounts. The central bank found itself in the position of hedging a bet it had no interest in hedging, because doing so would have undermined the floor it was trying to defend. Removing the floor did not eliminate that exposure; it crystallized it, since the francs already on the SNB's balance sheet, once converted back to a stronger currency, were immediately worth less in franc terms the moment the peg broke.

How Did Swiss Stocks React, and What About Exporters?

A currency floor breaking is a currency-market story first, but a sudden 15% to 20% appreciation against a country's largest trading partner is also a direct hit to the earnings outlook of companies that sell into that market, and Swiss equities repriced accordingly within minutes.

Swiss Market Index levels around the announcement, from daily historical market data.

The index opened January 15 essentially unchanged from the prior close, since the announcement landed before the equity market's own open had fully absorbed it, then fell as low as 7,932.23 intraday before closing at 8,400.61, a decline of about 8.7% from the January 14 close. That is among the sharpest single-session declines in the index's history. The following day it fell further, to a close of 7,899.59, meaning the two-day peak-to-trough move in Swiss equities was on the same order of magnitude as the currency move itself. The composition of the losses was uneven: companies with large export revenues and costs concentrated in Swiss francs, which suddenly became more expensive to produce relative to what their foreign sales would earn, were hit hardest, while domestically focused businesses were affected mainly through the general drop in sentiment and the risk of a broader economic slowdown.

Measured by closing levels, the index did not close back above its January 14, 2015 level of 9,198.20 until March 16, 2015, roughly two months later. That is a useful number precisely because it contradicts a common shorthand about this event, that Swiss markets "snapped back" quickly. They did stabilize within days, but a full nominal recovery in the equity index took closer to nine weeks, consistent with a stronger currency being a persistent drag on the earnings the index is pricing rather than a one-day shock that reverses on its own.

The real economy showed a smaller, but still measurable, version of the same pattern. Using seasonally adjusted quarterly GDP data, Swiss real output edged down by about 0.2% quarter over quarter in the first quarter of 2015, the quarter containing the shock, before growing again in every subsequent quarter of the year. A single quarter of mild contraction is not, by the common two-consecutive-quarter definition, a recession, and Switzerland did not have one in 2015. The dip is nonetheless a real, data-confirmed cost of the currency move, distinct from the sharper and more visible reaction in equities and in the leveraged corners of the FX market. Consumer prices tell a related story: Switzerland was already in mild deflation before the shock, and year-over-year consumer price inflation, using the same data series, deepened from about -0.5% in January 2015 to about -1.3% by December 2015, consistent with the deflationary pressure the SNB had cited as a concern back in 2011 reasserting itself once the franc was allowed to strengthen further.

Why Did the Euro Keep Falling the Following Week?

The SNB's own explanation for abandoning the floor pointed at dollar weakness in the euro, not at any single event. But the timing lines up with one event closely enough that it is worth stating precisely rather than leaving it as an implication.

On January 22, 2015, seven days after the SNB's move, the European Central Bank's Governing Council announced an expanded asset purchase programme. The ECB's own press release described "combined monthly asset purchases to amount to €60 billion," with purchases "intended to be carried out until at least September 2016," aimed at addressing "the risks of a too prolonged period of low inflation" in the euro area.

A central bank that is about to begin creating tens of billions of new euros every month, for a program with no fixed end date short of a year and a half away, is a central bank whose currency has a credible reason to weaken further. The SNB's franc floor was defined purely against the euro. Continuing to defend that floor through the start of a large, open-ended euro-area quantitative easing program would have meant an increasingly large and increasingly one-sided bet: buying euros that the ECB itself was about to make more plentiful, in whatever quantity was needed to hold the rate, with no end date attached to the SNB's own commitment either. Market participants and central bank watchers had anticipated some form of ECB balance-sheet expansion for months before the January 22 announcement, which is itself a piece of context worth carrying into the next section: the SNB did not need the ECB's specific numbers to see this coming, only the direction.

This is also why the euro fell further in the days after January 22 even though the SNB had already made its move a week earlier: the SNB's decision addressed the Swiss side of the equation, but the ECB's announcement was the euro-area event actually driving the underlying pressure. Two policy decisions, one week apart, were responses to the same set of forces working through two different institutions, discussed in the broader context of that period's global monetary policy divergence in Federal Reserve policy rates and forward guidance.

What Warning Signs Existed Before January 15, and What Was Only Obvious in Hindsight?

This episode offers an unusually clean test of the difference between a visible structural condition and a predictable trigger date, because the SNB's own public statements bracket the event so precisely.

Signals classified by whether they could be observed using information published before January 15, 2015.

The uncomfortable finding sits in the fourth row. A reader who had tracked the SNB's own balance sheet and concluded, correctly, that defending the floor was becoming more expensive over time would still have read the December 18 statement as the central bank doubling down, not preparing an exit. There was no public document, official statement, or leaked deliberation that pointed toward January 15 specifically. What existed was a structural condition, rising defense costs, and a nearby catalyst, anticipated ECB easing, that together made some kind of change more likely at some point. Turning that into a trading decision would have required being willing to bet against an explicit, recent, written commitment from the institution with the power to make that commitment true for as long as it chose to. Why a warning sign only looks obvious once the outcome is known is covered more generally in cognitive biases in trading.

Why Doesn't a Stop-Loss Order Protect You From a Policy Gap?

A stop-loss order instructs a broker to close a position once the price reaches a specified level. Most traders who use one implicitly assume it caps their loss at roughly that level. The Swiss franc shock is one of the clearest real-world demonstrations of why that assumption fails during a genuine gap event.

A stop-loss order is a trigger, not a guarantee of the price at which the position closes. It converts, once triggered, into an order to sell at the next available price. If the market is trading continuously and liquidly, the next available price is close to the stop level, and the distinction rarely matters. If the price jumps because a central bank removes a defended floor with no warning, the "next available price" can be far below the stop level, or, as happened to FXCM's clients and others on January 15, 2015, there may be no price at all for a stretch of time because market makers have stopped quoting. When trading resumes, the order fills wherever the market has actually moved to, which for CHF pairs that day was, for many participants, tens of percent away from where the stop was set.

This is why leveraged positions in an asset with a policy-defended price level carry a specific, named risk that ordinary volatility does not: gap risk. It applies to any instrument whose price is being held artificially stable by an announced commitment, a currency floor, a fixed exchange rate regime, or, in different form, a stablecoin peg, because the same mechanism that keeps volatility low right up until the commitment breaks also concentrates the entire adjustment into the moment it does. A position sized for the historical volatility of a pegged asset is systematically undersized for the volatility that shows up the one time the peg fails. Sizing a leveraged position with this risk in mind, rather than the recent trading range alone, is covered in position sizing and risk per trade, and the mechanics of where a stop order actually fills relative to where it is set are covered in the stop-loss and risk/reward calculator.

Why Is the Swiss Franc Shock a Poor Template for the Next Currency Peg Break?

Three features of this event were specific enough that expecting an identical repeat elsewhere is likely to leave a reader unprepared for what actually happens next.

The floor was one-sided by design, which is unusual. Most currency pegs and bands are defended in both directions, requiring the central bank to sell reserves when the currency is weak and buy them when it is strong, which is a genuinely different and often harder problem, illustrated with a different mechanism and outcome in the Bretton Woods collapse. The SNB's floor only ever required it to sell francs and buy foreign currency, the side of the trade a central bank can always execute, which is precisely why it could be defended "with unlimited" purchases for over three years without the kind of reserve-depletion crisis that ends most two-sided peg defenses.

The move was a policy choice made from a position of strength, not a forced capitulation. The SNB was not running out of reserves and was not compelled by a market attack to abandon the floor; its own statement described a judgment that the costs of continuing had come to exceed the benefits. That is a different animal from a central bank that defends a peg until it physically cannot anymore, the pattern behind several emerging-market currency crises, including the mechanism covered in the Asian financial crisis. A voluntary policy reversal by a well-reserved central bank can happen with no advance warning at all, precisely because nothing forces its hand or its timing.

The shock absorber was interest rates, and it was already close to exhausted. The SNB's chosen offset, cutting the policy rate to -0.75%, was itself among the most negative policy rates any major central bank had used up to that point. A central bank facing a similar dilemma with more conventional, positive interest rates has a tool the SNB had largely already spent by January 2015, which is part of why the SNB's transition was managed through a currency move rather than through further rate cuts alone.

Common Misconceptions About the Swiss Franc Shock

"The SNB lied on December 18." The December 18 statement described the SNB's intention at the time it was made, and the SNB had no announced reason to believe it would change within weeks. Time inconsistency in central bank commitments is a structural feature of forward guidance, not evidence of deliberate deception. The lesson for a reader is about how much weight to place on such statements, not about the SNB's honesty.

"Everyone in currency markets should have seen this coming." The direction of the underlying pressure, a euro area heading toward quantitative easing and an increasingly expensive floor to defend, was visible in public data. The specific date, and the fact that the SNB would move without any interim step or warning, was not observable from any public source before the announcement itself.

"Only leveraged forex traders were affected." Leveraged retail traders and their brokers took the most visible and immediate hit, but Swiss equities fell for weeks afterward, Swiss GDP recorded a measurable quarterly dip, and Swiss consumer prices moved deeper into deflation through the rest of 2015, effects that reached well beyond anyone actively trading the currency pair.

"A stronger franc was bad for everyone in Switzerland." A stronger franc raised the relative cost of Swiss-made exports and squeezed Swiss tourism, and it also meant Swiss residents and francs-holding savers could buy more of anything priced in euros or dollars, from imported goods to foreign travel to foreign assets, with the same number of francs. Currency moves of this size redistribute real purchasing power between exporters and importers, and between residents and foreigners, rather than making a country uniformly worse off.

What a Reader Can Actually Carry Forward

The specific tool, a one-sided euro floor defended by a small open economy's central bank, will not recur in identical form. What generalizes from this episode is broader and applies well beyond currency trading.

What generalizes

• A central bank's forward-looking statement describes its intention today, not a binding constraint on tomorrow. "Utmost determination," stated in writing four weeks before a full reversal, is the cleanest documented example available of why forward guidance of any kind carries this limit, a theme also visible in the 2013 taper tantrum, where a change in the pace of stated intentions, not an outright reversal, was still enough to move markets sharply.
• Positions built around a policy-defended price level carry gap risk that ordinary volatility measures understate. The lower the historical volatility of a pegged or defended asset looks, the larger the single-event risk usually sitting underneath it, because low measured volatility is often evidence the defense is currently working, not evidence the underlying pressure has gone away.
• A rising cost of defending a commitment is a visible, trackable signal, even when the timing of any change remains unknowable. The SNB's own balance sheet data showed the defense becoming more expensive years before it ended. Watching the cost of maintaining any policy commitment, a peg, a subsidy, a rate cap, is more informative than watching for an announcement that a change is imminent, because that announcement, when it comes, is frequently the change itself.
• Leverage converts a large but survivable price move into an unbounded one. The same 15% to 20% currency move that dented an unleveraged saver's foreign purchasing power calculation was enough to wipe out and then exceed the entire account balance of leveraged retail traders, and to threaten the regulatory capital of at least one publicly listed broker.

What does not generalize

• The specific one-sided mechanics of the CHF floor. Most pegs are defended in both directions and fail through the opposite mechanism, reserve exhaustion under depreciation pressure, not a voluntary exit from a position of strength.
• The scale of the move. A 15% to 20% two-day move between two G10 currencies that had been trading in a policy-defended band for over three years is unusual even among currency-peg breaks; most managed float adjustments are smaller and more gradual.
• The absence of any credit-quality question. Nothing about this event involved a borrower's ability to repay debt or a company's solvency in the way a credit crisis does; the SNB, the Swiss government, and the Swiss banking system were never in question. The damage ran entirely through market prices and leveraged positions, not through creditworthiness.

The one question worth asking now

Not "could a central bank surprise the market again," which is almost certain to happen in some form eventually, but a narrower and answerable one: does any position in your own portfolio depend on a policy commitment, a peg, a rate cap, a stated forward-guidance path, continuing to hold exactly as announced, and if that commitment ended tomorrow with no warning, would the resulting loss be bounded by what you have actually put at risk, or could it exceed it through leverage. For an unleveraged holding, the answer to the second half is almost always bounded. For a leveraged one, January 15, 2015 is the reason to check.

References

Every figure on this page was verified against the following sources, each retrieved on 26 August 2026:

• Swiss National Bank: Swiss National Bank Sets Minimum Exchange Rate at CHF 1.20 per Euro: the September 6, 2011 announcement of the floor, its stated rationale, and the "utmost determination" and "unlimited quantities" language.
• Swiss National Bank: Swiss National Bank Introduces Negative Interest Rates: the December 18, 2014 introduction of the -0.25% rate on sight deposits, the widened Libor target range of -0.75% to 0.25%, and the explicit reaffirmation of the CHF 1.20 floor "with the utmost determination."
• Swiss National Bank: Swiss National Bank Discontinues Minimum Exchange Rate and Lowers Interest Rate to -0.75%: the January 15, 2015 discontinuation of the floor, the rate cut to -0.75%, the new Libor target range of -1.25% to -0.25%, and the stated reasoning regarding the euro's depreciation against the US dollar.
• European Central Bank: ECB Announces Expanded Asset Purchase Programme: the January 22, 2015 announcement of combined monthly purchases of €60 billion, intended to run until at least September 2016.
• U.S. Securities and Exchange Commission: FXCM Inc. Form 8-K, Exhibit 99.1, FXCM Comments on Swiss Franc Movement: the January 15, 2015 disclosure of approximately $225 million in negative client equity balances and the risk of breaching regulatory capital requirements.
• U.S. Securities and Exchange Commission: FXCM Inc. Form 8-K, Exhibit 99.1, FXCM Provides Further Details on Financing with Leucadia National Corporation: the $300 million two-year term loan agreed January 16, 2015, its approximately $279 million net proceeds, and its 10% initial interest rate rising 1.5 percentage points per quarter to a 17% cap.
• Swiss National Bank: Data Portal, Balance Sheet of the SNB (cube snbbipo): year-end foreign currency investments and total assets for 2010 through 2014.
• Federal Reserve Bank of St. Louis, for the daily exchange rate data used to build the implied CHF-per-EUR series: Switzerland / U.S. Foreign Exchange Rate, Series DEXSZUS and U.S. / Euro Foreign Exchange Rate, Series DEXUSEU.
• Federal Reserve Bank of St. Louis, for Swiss real GDP and consumer price data, both OECD-sourced series: Real Gross Domestic Product for Switzerland, Series CLVMNACSCAB1GQCH and Consumer Price Index for Switzerland, Series CHECPIALLMINMEI.
• Historical daily price data for the Swiss Market Index (ticker ^SSMI), retrieved from Yahoo Finance market data, for the open, intraday low, and close levels used in the equities section and the March 16, 2015 recovery date. This is a market data aggregator rather than the exchange's own primary feed, and is disclosed as such.

Figures deliberately not stated. This page gives no precise intraday tick or minute-by-minute low for the EUR/CHF exchange rate, because no primary or institutional source verified for this page publishes tick-level historical FX data; the daily close-based figures in the tables above are what could be verified, and the text says explicitly that the intraday range was wider. It gives no loss figure for Alpari (UK) Limited, IG Group, Interactive Brokers, Saxo Bank, or any retail broker other than FXCM, because FXCM's SEC filings were the only broker-specific loss disclosures verified against a primary source this session; other brokers are described only by the general, well-documented fact that some failed or entered insolvency, without an unverified number attached. It gives no figure for the SNB's own 2015 annual financial result, because that figure could not be located and verified from an SNB source within this session.

Method note: the implied CHF-per-EUR figures in this article are calculated by Swoopr Investment by multiplying the Federal Reserve's published USD/CHF and USD/EUR daily rates; they are not a directly quoted market series and will not exactly match a live EUR/CHF trading screen. Percentage changes in the Swiss Market Index are based on daily open, low, and close price levels and exclude dividends. GDP and CPI figures are quarterly and monthly series respectively, both seasonally adjusted where noted, sourced via FRED from OECD-compiled national accounts and price data.

This is educational content about a historical episode. It is not investment advice, it is not a forecast, and nothing here should be read as a claim about current Swiss National Bank policy or any current currency peg.

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