Avoid excessive backing for franc

The Swiss National Bank (SNB) announced on Wednesday plans to provide around 1.8 billion euros to support Swiss companies hit by the current strength of the Swiss franc and increase the liquidity of the Swiss franc money market. The liberal daily Corriere del Ticino welcomes the measure as a sensible alternative to pegging the franc to the euro: "After last autumn's costly and partially unsuccessful euro purchases the SNB has corrected its strategy. After a long phase of non-intervention it has in rapid succession reduced the three-month Target Libor rate to just above zero and above all massively increased liquidity on the money market. This has had little impact so far but a slight weakening of the franc is gradually become discernible. ... Before the Executive Federal Council's announcement yesterday that it would support certain sectors can be judged we must wait for the details of how this support will be structured. This step by Bern is a positive development, but care must be taken to prevent the floodgates of excessive public spending from reopening."

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