What would a crisis look like right now, and how would you know?
Crises start quietly: a failed fund, a frozen market, a currency breaking a level it never breaks. Imagining the crisis before it arrives is how traders recognise it early.
Post your scenario:
- the first sign you'd expect
- the markets that would move first
- what you'd do in the first hours
Background: the Asian crisis and the SNB shock for templates.
Background: The Swiss franc shock of 15 January 2015: when the SNB scrapped the 1.20 floor
The Swiss National Bank abandoned its minimum exchange rate of CHF 1.20 per euro without warning, and the franc jumped within minutes. What happened, why, and what it taught traders about risk.
Why did the SNB remove the EUR/CHF floor in 2015?
The SNB said the monetary policies of the major currency areas had diverged significantly and the euro had weakened against the dollar, so enforcing the CHF 1.20 minimum exchange rate was no longer justified.
When was the Swiss franc floor introduced?
The SNB introduced the minimum exchange rate of CHF 1.20 per euro in September 2011 and discontinued it on 15 January 2015.
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