SNB Removes EUR/CHF Floor

The Swiss National Bank removed the EUR/CHF 1.20 floor on January 15, 2015, which had been in place since September 2011, while cutting further the 3-month interest rate target (to between -1.25% and -0.25%).  This research paper provides analysis into the potential outcomes of this move by the SNB to the Swiss economy, and illustrates the deflation risk in Switzerland and how it may fare better than deflation risk in the Eurozone through its risk index model.