Swiss National Bank (SNB)
Switzerland's central bank, known for the 2015 EUR/CHF floor removal that caused historic market disruption.
The SNB is Switzerland's central bank, best known in trading for removing the EUR/CHF 1.20 floor in January 2015, surging the franc 30% in minutes. The event remains the defining lesson in tail risk.
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
Swiss National Bank (SNB) Example
Say EUR/CHF sits pegged at 1.20 for three years, then the SNB removes the floor without warning. The franc jumps 30% in minutes, several brokers fail, and stop-losses fill hundreds of pips away. The most famous peg break in modern forex.
How Traders Use Swiss National Bank (SNB)
Treat every peg as temporary, however official it sounds. Never hold max size into SNB meetings, keep stops that assume gaps, and remember the lesson: central banks exit floors when keeping them hurts more.
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