Swiss bank head says 'acted correctly' on currency deals

5th January 2012, Comments 0 comments

Swiss central bank chief Philipp Hildebrand on Thursday rejected criticism of foreign currency transactions by his family last year, refusing to step down and suggesting "political motives" were at work.

Speaking publicly for the first time about the scandal, Hildebrand told said he had complied with all the regulations of the central bank but conceded he had made mistakes and that banking transparency would need to be tightened.

"I acted correctly on every count," he said following days of media speculation over allegations of insider trading on a dollar trade his wife made in August three weeks before the Swiss National Bank put a cap on the Swiss franc at 1.20 euro.

"So long as I have the confidence of the government and the bank council, stepping down is not an issue for me," said Hildebrand, who appeared confident while fielding questions in German and French.

"Looking back I made mistakes," he added however, saying he could have reversed his wife's decision.

"The most important lesson I can take from the events is -- another improvement of transparency in every aspect that concerns financial transactions of members of the board of the Swiss National Bank is essential."

Hildebrand has been credited with increasing Swiss banking transparency after the 2008 global financial crisis, helping the country meet counter some fierce attacks by its foreign partners over its secrecy traditions.

It emerged last month, however, that his wife Kashya Hildebrand profited after buying $504,000 in August, just weeks before intervention by the SNB to halt the rise of the franc -- a move that saw the dollar rise significantly against the Swiss currency.

The purchase, which investigators said appeared to have been carried out without her husband's knowledge, was deemed "sensitive" by auditors who nevertheless cleared the couple of any wrongdoing.

Pressed on not knowing about his wife's trade, Hildebrand told a press conference that his wife had a "very strong personality.

"My wife has very strong opinions and is very interested in global financial markets," he said.

Bank Sarasin in Basel this week dismissed an employee who allegedly transmitted transaction details to a lawyer close to the far-right Swiss People's Party whose chief Christoph Blocher is a Hildebrand critic.

Zurich prosecutors have launched a criminal case against a 39-year-old former bank worker.

The Swiss government, whose own Federal Audit Office carried out a dual investigation exonerating the couple, is standing by the bank chief.

Hildebrand joined the SNB board in 2003 and was appointed chairman seven years later.

He is also vice chairman of the Financial Stability Board, an international body tasked with promoting financial sector reform in light of the 2008 crisis, a member of the board of directors of the Bank for International Settlements (BIS) in Basel.

Hildebrand's wife, a former hedge fund worker who now runs an art gallery, defended herself against the media storm earlier this week, saying she bought the dollars due to the fact that the currency had "hit a very low level and become ridiculously cheap."

According to Le Temps newspaper, the scandal broke after Blocher went to then-president Micheline Calmy-Rey.

Blocher, a critic of SNB policy under Hildebrand, has so far remained silent on the controversy.

© 2012 AFP

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