Definition – What does Gnomes of Zurich mean?
The Gnomes of Zurich was the nickname British Labor party politicians gave to the Swiss bankers during the 1964 Sterling crisis. Gnomes are legendary creatures found in every country with some slight variation in behavior. In Britain, gnomes act like leprechauns and hide gold in booby-trapped lairs under the streets. In Africa, they pinch people at night until someone leaves food for them. The foreign exchange speculators in Zurich had become so powerful and secretive by the 1960s that the British began to see similarities between them and the gold-hoarding gnomes beneath the streets.
ForexTerms explains Gnomes of Zurich
The British government labeled the Swiss bankers with this mildly offensive term because they believed the Swiss were responsible for devaluing the Sterling. Today, Zurich continues to be an important financial market, retaining its place as the primary market for gold and precious metal transactions. The British ministers have, however, stopped calling the Swiss gnomes – possibly because the Swiss kept pinching them at night.