Large financial institutions such as Citigroup, Deutsche Bank and Barclays have accumulated losses of 400 mln. USD following the decision of the Swiss central bank to free the exchange rate of the franc, reported Bloomberg. Experts warn that this is only the beginning and the financial sector will suffer much more. After the Swiss central bank unexpectedly abandoned its policy to maintain a maximum rate of 1.2 francs per euro, the exchange rate of the Swiss franc rose sharply, leading to a disruption in the capital markets and concerns about the competitiveness of local exporters.
"The losses are still piling up and would amount to billions. There will be a chain reaction throughout the financial system and will be affected everyone - from big banks in brokers, hedge funds and mutual funds to currency speculators," said Mark Williams, an expert in risk Management from Boston University. In his words, short selling the Swiss franc have been very popular with foreign exchange trading because of the stability of the exchange rate provided by the central bank. According to him, many companies have used leverage of 20: 1 or more in these transactions, which means that in case of only 5% compared to the total value position is deleted. During the trade last week with the shift of the franc reached 41%.
Sources Bloomberg Citigroup, which is the largest currency trader in the world, has lost more than 150 million. Dollars last week. Similar losses from currency trading and the German Deutsche Bank, Barclays and British lost about 100 million. Dollars. The three banks declined to comment officially.