Citigroup's Swiss Franc Loss

In 2011, the Swiss National Bank pegged the Swiss franc to the euro, at a rate of 1.2 francs per euro. As recently as December, Swiss officials stood by the peg. Then, on January 15th, the Swiss National Bank unexpectedly removed the peg, sending the Swiss franc up up by 30 percent on the day. Unfortunately for Citigroup, the company had let it's Swiss franc hedge expire the previous week. As a result, Citigroup lost more than $200 million in the hours following the announcement. Of course, not everyone lost: It was reported that JPMorgan Chase & Co. had gained $300 million on the removal of the franc peg. The cost of the hedge was likely a reason that Citigroup allowed the position to expire. During the previous year, Citigroup lost $100 million on a hedge tied to unrest in the Ukraine.