Swiss central bank chief says he will not quit over scandal

ZURICH – Switzerland’s embattled top central banker vowed to fight “with all means” accusations of wrongdoing centred on a currency trade made by his wife three weeks before he imposed a cap on the soaring Swiss franc.

Swiss National Bank (SNB) chairman Philipp Hildebrand told a Swiss news conference he had no plans to quit after an employee of the bank used by his family leaked bank account details to the lawyer of a political adversary.

“As long as I have the confidence of the government and the bank council, stepping down is not an issue for me,” Mr Hildebrand told a news conference in Zurich.

Looking back, I made mistakes, but I always acted in line with the rules, and I can look at myself in the mirror,” said Mr Hildebrand.

He conceded he had not been “totally surprised” when he saw his wife had spent 400,000 Swiss francs ($423,800) on buying dollars last August.

“She repeatedly talked about how low the dollar is and that we probably should buy more . . . Either I should have reversed the transaction or even told her not to discuss this.”

The furore now threatens to tarnish the image of the SNB, whose credibility is key to its ability to curb the strength of the franc and stop it harming exporters and triggering deflation.

The Swiss cabinet has said it has full confidence in Mr Hildebrand, a suave 48-year-old former hedge fund manager turned architect of tough global banking regulations and vice chairman of the Financial Stability Board international supervisory body.

But critics of the Hildebrand couple, who both bought dollars last year, and of the central bank, which initially declined to divulge staff ethic codes and details of internal investigations in the episode, sharpened their swords.

“A man who used his bank account for private forex deals worth several hundred thousand francs is simply in the wrong place heading the central bank,” the deputy editor of the Berner Zeitung newspaper said in an editorial.

Mr Hildebrand’s wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought “ridiculously cheap” dollars on August 15th, three weeks before her husband oversaw steps to cap the rise of the franc.

Switzerland guards bank client confidentiality jealously – to the extent that its banks are plagued by scandals over their role in tax avoidance schemes for the worlds wealthy – so the Bank Sarasin employee who leaked news of Mrs Hildebrand’s trade was also in the firing line. – (Reuters)