THE STORY OF CHF OR HOW TO LOSE YOUR SLEEP AND MONEY BY IGNORING THE FOREIGN CURRENCY RISK

Abstract

This paper represents an empiric research how The Central Bank of Switzerland gave up on sustaining the minimum exchange rate for CHF, as a result of a dramatic movement in the history of the FX market. The decision has equally affected companies or families that got loans (usually in another currency than their incomes). Due to the troubles that reached social dimensions in some ECE countries, we decided that it is worth making an academic X-ray upon the way the specialists succeeded in transmitting their experiences to the others. The lessons from history should be learnt, it is the scientists’ duty to use their ability to get into the essence of the phenomena and to reveal the conclusions to the ones around.