SNB Crisis: Recollections and Repercussions

A roundup of the articles that Finance Magnates has been publishing examining the event from a number of different angles.

No-one who works in this industry could forget the events of January 2015, and as we passed the first anniversary of the disaster, Finance Magnates published a series of articles examining the event from a number of different angles.

 

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We began with an interview with James Watson, the managing director of ADS Securities. Mr. Watson explained that the removal of the peg was not an isolated event, rather it reflected a process which had begun in 2014. In the interview he outlines three major industry challenges, and how he sees the industry developing in the future.

 

We then briefly outlined the events of the 15th of January, detailing some of the most notable casualties. In this article we reached out to Charalambos Psimolophitis, CEO of FxPro, who captured the spirit of the occasion by recalling “…the sight of a dealer bursting out of his office and running around like he was in flames.”

 

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Ron Finberg wrote a very interesting piece which examined the old adage that there is no such thing as bad publicity. Much like Donald Trump’s sometimes outrageous comments seem to have only made him more popular, is there a “correlation between negative headlines and positive account growth in the forex industry”?

 

Victor Golovtchenko provides an in-depth analysis on how liquidity has been affected by the event. Brokers from all tiers have found that their access to liquidity has been disrupted, and in this article Andrew Ralich of OneZero and Marco Bagglioli of ADS Securities also weigh in with their insights as to exactly how.

 

Anna Reitman asks whether any risk management lessons been learned from last year’s debacle. Featuring insights from Simon Smith, Chief Economist at FxPro, and Andreas Clenow, Chief Investment Officer at Zurich-based ACIES, this article discusses if risk management could have mitigated some of the damage, and how it can do so more effectively in the future.

 

In mid-2014, the economist and financial strategist Martin Armstrong predicted the SNB crisis. In 2015, he was named Forex Person of the Year by FXStreet, the fifth person to win the title. In this fascinating interview, Victor Golovtchenko picks the prophet’s brain, discussing exactly what he saw before January 2015, and what he expects to happen in 2016. Considering the possible exit of the UK from the EU, and the likelihood of all dollar pegs being discarded in the near future, the prognosis is a wild one.

 

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Involved with the markets from the age of 19, John Putman II shares his account of the crisis, in a personal and dramatic article. Putman describes the fundamental changes that the event caused to his outlook on the industry, and what made him decide that he could “never risk other people’s money to this market again.”

 

Finally, Victor Golovtchenko presents a fascinating interview with the CEO of GAIN Capital, Glenn Stevens. GAIN Capital managed the crisis relatively well, and the executive offers his two cents on the issue of risk management in the face of volatility. He explains how GAIN Capital made moves more than a year before the SNB event, meaning that the blow for the firm was softened, and how he is surprised at how slow the industry has been at adopting risk management policies following the crisis. His analysis of the state of the industry is well-informed and worth a read.

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