SNB Abandons Euro / Swiss Franc Exchange Rate Lower Limit

On Thursday, the Swiss central bank announced its abandonment of the euro exchange rate of 1.20 against the Swiss franc.

The Swiss central bank triggered a sharp market shock. The Swiss Franc soared and the euro fell 28% against the Swiss franc.

The sudden shock of the foreign exchange market caused the banks and foreign exchange securities companies to lose to varying degrees.

The report was quoted by people familiar with the matter.

The central bank's black swan event affected Deutsche Bank's losses of about $150 million.

Deutsche Bank is one of the largest foreign exchange broker banks in the world.

Another person familiar with the matter said Barclays lost tens of millions of dollars, not more than 100 million dollars.

The Swiss central bank's "face changing" incident will not have a substantial impact on Barclays financial position.

According to financial blog Zerohedge analysis, Goldman Sachs also has related losses.

Goldman Sachs said in its latest report that it is expected that

Normalization

It will withdraw from Switzerland, which will not support the CHF at a higher price.

So Goldman continued to sell the Swiss franc.

Goldman Sachs was shocked by the Swiss bank's surprise abandonment of the euro's exchange rate of 1.20 against the Swiss franc.

After the news came out, Goldman Sachs withdrew from many positions in the Swiss franc.

On the same day, Goldman Sachs CFO said the Swiss central bank incident had not had a substantial impact on Goldman Sachs.

According to Bloomberg news, Citigroup lost more than $150 million on its own trading platform by the Swiss central bank's case, which does not include Citigroup and Fuyuan and other foreign exchange retailers.

Coincidentally, this week, Citigroup's European sales director, Alex Jackson, left.

Citigroup is one of the largest foreign exchange broker banks in the world.

The huge losses of these large banks are partly due to the fact that some of the options held by traders include certain options, which are linked to the Swiss Franc exchange rate or market volatility.

The Swiss central bank's decision to promote the surge and volatility of the Swiss Franc has led to heavy losses on its positions.

On the whole, the Swiss central bank has announced the abandonment of the lower limit of the euro and Swiss Franc exchange rate, causing huge losses to several major banks, but the relative percentage of losses is relatively small and has limited impact on banks.

However, the Swiss central bank has experienced bloodbath brokerage, especially foreign exchange business, which is mainly foreign exchange business.

Because of short-term market changes too abrupt, these brokers' customers burst positions, margin can not cover losses, many customers owe the additional funds of brokerages, accumulated a surprising loss.

Fu Hui, the largest foreign exchange broker in the US, lost $225 million. The company's share price plunged 85% before its market value plummeted from $600 million to $90 million. It suspended trading in New York.

According to the Wall Street news website, Fuhui seeks help from Jefferies for $200 million.

In addition, the loss of Interactive Brokers by large dealers was as high as 120 million US dollars.

Small companies are unable to cope with this incident: the Alpari UK, the Premier League's sponsor, announced the liquidation and the New Zealand foreign exchange broker Excel Markets also declared bankruptcy.