<b>Q: </b>Why did the Swiss National Bank decide to scrap its currency ceiling, shocking the world?
A: As the ECB begins mass money printing, the Swiss decided they would have to sell massive amounts of Swiss francs to stop people investing in their currency. The bank already own assets worth about 80pc of Swiss economic output compared to the US Federal Reserve which has 25pc. The Swiss bank was losing money and this was a political issue.
Q: It will push up the price of Swiss exports. That can't be good for them?
A: Politicians won't be happy but the move again highlights the difference between central banks, which must take a long-term view, and politicians who think short-term.
Q: It is almost unprecedented for a currency to jump so much in a day. Did dealers not know it would happen?
A: Adulterers and central banks can't help lying. The Swiss National Bank told the world as recently as last week that pegging the euro to the franc was the cornerstone of Swiss policy. Turns out it was a ruse.
Q: Could this happen again or elsewhere?
A: China suffers the same problem with US dollars. One day the People's Bank of China will have to do the same.