The Swiss National Bank, or SNB, is considering setting up a task force to draw an emergency plan for dealing with a possible collapse of the euro, though the bank believes such a scenario is highly unlikely, SNB President Thomas Jordan said in an interview on Sunday.
He told SonntagsZeitung newspaper that one measure being considered is capital controls. Swiss policymakers imposed a ceiling of 1.20 versus euro in September last year to stem excessive gains in the currency following the worsening of the Eurozone debt crisis.
Jordan, who was appointed president on April 18, said that the central bank will continue to enforce the minimum exchange rate even under adverse economic conditions. Jordan said the Franc is clearly an over-valued currency and is affecting many firms.
Switzerland may need measures beyond the exchange rate limit if the risk of Greece exiting the Eurozone materializes, SNB spokesman Walter Meier told Neue Zürcher Zeitung newspaper.
Echoing Jordan's comments, Meier said a task force is exploring measures such as the introduction of capital controls.
Jordan said it is not possible to arbitrarily manipulate the currency. In the current economic situation, such an action could prove "disastrous and counterproductive."
Last week, there were reports that the euro members are preparing a contingency plan for Greek exit. However, the Greek finance ministry had rejected the news, saying such reports are hindering the country's efforts to address its challenges at this critical juncture.
by RTT Staff Writer
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