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At least Switzerland can control capital inflows from eurozone countries, unlike Germany. Presumably this will just affect Swiss franc deposits and not shiny yellow metal stored in the country, but...
Swiss Prepare Plans in Case of Euro's Demise
Switzerland is considering capital controls to fight a sharp rise in the Swiss franc in the event of a euro-zone collapse.
Capital controls—tools that directly influence the inflow of capital into Switzerland—are a radical measure that the Alpine nation hasn't employed since the 1970s.
The risk of a potential Greek exit from the euro has increased in recent weeks as the political crisis in Athens has intensified, heightening worries about possible effects on other heavily indebted euro-zone nations. This is strengthening the Swiss franc, traditionally considered a refuge in times of economic and political turbulence.
Switzerland—surrounded by, but not a member of, the European Union—is seen as a haven of fiscal and political stability, but turbulence in the currency bloc is a major risk for its economy. The country depends heavily on exports for growth, and the strong franc is hindering exports at a time when demand is slumping in the euro zone, Switzerland's biggest trade partner.
Because of the threat a euro collapse presents for the country, Bern earlier this year set up a task force to evaluate measures to be taken if such an event occurred, and measures to combat excessive franc strength that require coordination....
"The task force focuses on measures that require cooperation between the government and the central bank to fight Swiss franc strength," Mr. Jordan said in Sonntagszeitung. One such measure would be capital controls.
In the 1970s, Switzerland used such extreme measures to curb excessive demand for its currency. The country prohibited foreign investments in Swiss securities and real estate, and introduced negative interest rates on foreign deposits. Both tools failed to stem the Swiss franc's rise, which only halted after the central bank introduced a temporary peg to the deutsche mark, Germany's currency at the time.
Switzerland is considering capital controls to fight a sharp rise in the Swiss franc in the event of a euro-zone collapse.
Capital controls—tools that directly influence the inflow of capital into Switzerland—are a radical measure that the Alpine nation hasn't employed since the 1970s.
The risk of a potential Greek exit from the euro has increased in recent weeks as the political crisis in Athens has intensified, heightening worries about possible effects on other heavily indebted euro-zone nations. This is strengthening the Swiss franc, traditionally considered a refuge in times of economic and political turbulence.
Switzerland—surrounded by, but not a member of, the European Union—is seen as a haven of fiscal and political stability, but turbulence in the currency bloc is a major risk for its economy. The country depends heavily on exports for growth, and the strong franc is hindering exports at a time when demand is slumping in the euro zone, Switzerland's biggest trade partner.
Because of the threat a euro collapse presents for the country, Bern earlier this year set up a task force to evaluate measures to be taken if such an event occurred, and measures to combat excessive franc strength that require coordination....
"The task force focuses on measures that require cooperation between the government and the central bank to fight Swiss franc strength," Mr. Jordan said in Sonntagszeitung. One such measure would be capital controls.
In the 1970s, Switzerland used such extreme measures to curb excessive demand for its currency. The country prohibited foreign investments in Swiss securities and real estate, and introduced negative interest rates on foreign deposits. Both tools failed to stem the Swiss franc's rise, which only halted after the central bank introduced a temporary peg to the deutsche mark, Germany's currency at the time.
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