Swiss central bank Vice President Thomas Jordan said it would be possible to peg the franc to the euro for a limited period to help counter currency gains. “Any temporary measures to influence the exchange rate are permissible under our mandate as long as these are consistent with long-term price stability,” Jordan said in an interview with Tages-Anzeiger newspaper published today. SNB spokesman Walter Meier confirmed the remarks. The Swiss franc has gained 31 percent versus the euro over the past year, reflecting investor concern that the euro region’s fiscal crisis may continue to worsen. While the Swiss National Bank boosted liquidity on the money market and earlier this month trimmed borrowing costs to zero, the currency continued to appreciate, choking economic growth and exports. The franc weakened against all 16 of its most traded peers and traded at 1.0398 versus the euro at 9:06 a.m. in Zurich. It reached a record 1.0075 on Aug. 9. Against the dollar, the currency traded at 72.83 centimes. “We are able to increase liquidity even further,” Jordan said. “We are also considering a range of other monetary policy measures and we’ll act as soon as we’re convinced that it’s the right time,” he said without elaborating. Jordan also said he considers the franc “massively overvalued” against both the dollar and the euro. To contact the reporters on this story: Klaus Wille in Zurich at kwille@bloomberg.net; Paul Verschuur in Zurich at pverschuur@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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