Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167788
Authors: 
Lleo, Sebastien
Ziemba, William T.
Year of Publication: 
2015
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 3 [Year:] 2015 [Issue:] 3 [Pages:] 351-380
Abstract: 
Financial disasters to hedge funds, bank trading departments and individual speculative traders and investors seem to always occur because of non-diversification in all possible scenarios, being overbet and being hit by a bad scenario. Black swans are the worst type of bad scenario: unexpected and extreme. The Swiss National Bank decision on 15 January 2015 to abandon the 1.20 peg against the Euro was a tremendous blow for many Swiss exporters, but also Swiss and international investors, hedge funds, global macro funds, banks, as well as the Swiss central bank. In this paper, we discuss the causes for this action, the money losers and the few winners, what it means for Switzerland, Europe and the rest of the world, what kinds of trades were lost and how they have been prevented.
Subjects: 
Swiss franc
Euro peg
black swans
currency trading losses
Swiss exports
quantitative easing
negative interest rates
JEL: 
B41
C12
C52
G01
G11
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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