By fixing the exchange rate, Switzerland has, in a way, unilaterally joined the euro. As a haven destination, Switzerland faces problems not unlike Germany's. Just as the Bundesbank's claims on TARGET2 swell, so too are the SNB's euro-denominated assets....Read it at INET | The Money View
When will Switzerland exit the euro?
by Daniel H. Neilson
(Dr. Neilson earned his B.A. from Bard College of Simon's Rock in 2001 and his Ph.D. from Columbia University in 2009. In addition to his work for INET, he teaches economics at Simon's Rock.)
(h/t Perry Mehrling at The Money View)
2 comments:
wrote a post on exactly this topic today without even seeing this.
Shows the weakness in the neoliberal doctrine that freely floating rates maintain equilibrium through market coordination.
Who would have guessed that "sound-money Switzerland" would have been sucked into the vortex by being forced to defend its economy by intervening heavily to prevent it from becoming too strong for Switzerland to be competitive.
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