Did Someone Blow Up the Swiss Currency Peg?

Much to the surprise of numerous market players, the Swiss National Bank yesterday (Jan. 15, 2015) dropped its commitment to peg the Swiss franc at 1.20 to the Euro.  The Swiss franc suddenly rose some 20% in value, a price shift that clobbered anyone betting the peg would hold.  Losses have been sudden and very sharp.  A major foreign exchange broker, FXCM, has received an emergency $300 million bailout loan from Leucadia National.  Another forex broker, Alpari UK, has entered insolvency proceedings.  A new Zealand broker, Excel Markets, has been knocked out of business.

The Swiss National Bank's reasons for abandoning the peg aren't very clear.  But the abrupt demise of the peg is reminiscent of the UK's withdrawal of the British pound from the European Exchange Rate Mechanism in 1992, after a large hedge fund shorted over 10 billion pounds on September 16, 1992.  The Bank of England was trying to fight market forces that dictated a lower valuation for the pound, and in the end couldn't win that fight. 

A news story reports that in December 2014, there was a very large capital inflow into the Swiss franc, with some 34 billion francs being bought up.  See http://www.cnbc.com/id/102343957.  This is about 10 times the monthly average.  One can wonder whether this flood of capital was the result of a calculated move by one or a few big market players.  While there has for some months been a flight to safety resulting from the EU's economic slowdown (and the likely de facto devaluation in the near future of the Euro via ECB quantitative easing), Vladimir Putin's banditry in Ukraine, and the never-ending turmoil in the Middle East, December's inflow is so abruptly large than one cannot exclude the possibility that it was a move made by a few powerful players.  And if it was, they would have profited handsomely from the Swiss franc's recent price rise.