The Sovereign Debt Crisis in the European Monetary Union in 2010—12/13 Triggered Huge Demand for the Swiss Franc as Safe Haven

Both countries (Canada and Australia) remained loyal and committed members of the 2% inflation standard. And so did that once hard money country Switzerland. In the 1990s it slowly drifted away from its monetarist past and adopted an inflation-targeting regime, albeit not so laser fixated on 2% as was more broadly the case. The sovereign debt crisis within the European Monetary Union in 2010—12/13 triggered huge demand for the Swiss franc as safe haven, to which the Swiss authorities responded by massive foreign exchange market intervention, a spell of  fixing a ceiling to the currency, and ultimately a journey into an emergency negative interest rate regime which persisted for years. The big difference from the Australian and Canadian experiences was the massive foreign exchange market intervention and the adoption of radical monetary-easing measures—perhaps indicative of an even greater potential “overshoot” of the currency which might have occurred if the Swiss had held their hard money ground.

—Brendan Brown, The Case Against 2 Per Cent Inflation: From Negative Interest Rates to a 21st Century Gold Standard (Cham, CH: Springer International Publishing, 2018), 142-143.