In defence of the Swiss National Bank

THE Swiss National Bank's peg of 1.20 Swiss franc to the euro, implemented in September 2011 to protect the currency from export-threatening appreciation, shuddered to an abrupt halt last month, causing financial market waves. The unexpected move exposed the SNB to considerable criticism, partly on the decidedly risible grounds that the central bank had given the markets no warning of the impending change.

In fact, the bank's decision was correct, if not overdue. Thomas Jordan, the SNB president, deserves plaudits, not brickbats, for bringing to an end an exchange rate distortion that was exacerbating further large-scale economic imbalances in Europe.

Defending the peg, forcing the SNB to take in massive quantities of the European single currency, was a fight the SNB could not win. A balance sheet burdened by too many depreciating euros, at a time of general European uncertainty and impending quantitative easing by the European Central B…