In a move that jolted currency markets, the Swiss National Bank, the European nation's central bank, pledged this week to drive down the value of its currency, the Swiss franc. The move was prompted by the rising value of the franc against the euro, a trend that has pummeled Swiss exporters.
While the move makes sense for the embattled nation, the question is whether it will unleash similar moves by other besieged export-dependent countries. If it does, the world risks a round of competitive interventions that will only end badly.
While Europe's main currency, the euro, has taken a beating in recent years as member economies battle their financial demons, the Swiss franc has climbed inexorably in value, appreciating more than 16 percent against a basket of nine major peers this year.