Frankenshock continues to cast a shadow on the SNB

Five years after the so-called Frankenshock, the SNB is near the end of the road for conventional monetary easing. Accordingly, the Bank may be forced to make another radical policy choice if there is a substantial appreciation in the franc in the coming years. We think that it is more likely than not that the Bank will reintroduce another currency ceiling or even some form of capital controls in the 2020s.