Central banks are powerful


“Once the dust settles, the markets will come to recognise that the SNB did it right. Central banks are powerful because they can take important decisions, not when they are seen to bow to market pressure. Remember the taper tantrum that followed President Bernanke’s gentle reminder that QE was not for ever. This pre-announcement was also seen as a loss of credibility. It seems that central banks can never win when their actions cause investor losses.”
Charles Wyplosz on the end of the Swiss franc’s one-sided exchange rate band.
More here: http://www.voxeu.org/article/end-swiss-franc-s-one-sided-exchange-rate-band

(Picture from the Economist and Miles Cole)

About bzik2

A beginning central banker with a twist
This entry was posted in Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s