Essential

Swiss National Bank (SNB)

Switzerland's central bank, known for the 2015 EUR/CHF floor removal that caused historic market disruption.

Definition

The Swiss National Bank is Switzerland's central bank, responsible for monetary policy and price stability. The SNB is best known in trading circles for the January 2015 shock when it unexpectedly removed the EUR/CHF 1.20 floor, causing the franc to surge 30% in minutes and wiping out several brokers. The event remains a defining lesson in tail risk and the danger of assuming central bank policies are permanent.

How It Works

Sets the SNB policy rate, which has been in negative territory for years
Intervenes in forex markets to prevent excessive CHF strength
Maintains one of the world's largest foreign exchange reserves as a result of interventions
Publishes weekly sight deposit data that traders use to detect intervention activity

Trading Tips

The 2015 SNB shock proved that central bank floors can be removed without warning, creating unhedgeable risk

Monitor SNB sight deposit data for signs of intervention

During global risk-off events, CHF strengthens as a safe haven, which may prompt SNB intervention

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