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Some Banks Tried To Renege On Deals After Snb's Policy U-Turn

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After the Swiss National Bank abandoned its price cap on the franc in January, some dealers such as Bank of America Corp (BAC.N), Barclays Plc (BARC.L) and Goldman Sachs Group Inc (GS.N) approached customers about changing some trades, Bloomberg reported, citing people familiar with the discussions.

The banks sought to reduce their losses by trying to renege on transactions by contacting customers after the SNB decision, asking to discuss the rates they'd traded on, Bloomberg said.

Some currency trading firms and major banks lost out when the SNB scrapped its three-year-old cap on the franc against the euro EURCHF=EBS without warning on Jan. 15. Barclays lost "tens of millions" of dollars and retail broker Alpari UK filed for insolvency.

The banks' attempts to reopen deals present their rivals such as electronic trading venues and established exchanges with a new argument - do business through us rather than dealers who can cancel or alter your trades after they have been executed, Bloomberg said.

Did they not take out CDS to minimise the risks??? Perhaps they assumed the SNB would keep the same policy forever.

I'm surprised they aren't asking for the taxpayers to cover the bill. I mean banks taking a loss on a bet, what a ridiculous idea.

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They're only interested in the one way bet.

They win - you lose.

How much do they want to be bailed out this time.

Edited by billybong

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'...discuss the rates they traded..'. Not an uncommon occurrence when prices are volatile; requests from customers as well as sometimes traders/sales. Doesn't say they actually reneged; they tried to - which has its own business implications so must have been significantly underwater.

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