The large central banks reacted to the Brexit shock as they should react to quick risk-off moves: they affirmed that if necessary the liquidity supply would be ample. However, in the majority of G7 countries, the local currencies are already drowning in liquidity.

So what is more important for the banks is the confidence that they will still be able to access the USD liquidity of their domestic central banks which the latter get from swap lines with the Fed.

The majority of central banks are happy with conventional measures such as that, but not the SNB. During the Brexit night, the Swiss National Bank intervened.

After all, everyone is meant to realize that the Swiss central bank will not tolerate an excessive appreciation of the franc. And after all, that is not exactly a new feature of Swiss monetary policy.

Since the minimum exchange rate in EURCHF was abolished interventions have become part of the SNB’s everyday repertoire.

The only question that leaves is what the advantage of ending the minimum exchange rate might have been in that case. Certainly not a step towards with the SNB’s declared aim of limiting its balance sheet.