Swiss National Bank Chief Quits Amid Trades Uproar
Swiss National Bank chief Philipp Hildebrand resigned Monday, acknowledging he could not prove his innocence amid a public uproar over his private currency deals. Hildebrand's resignation took effect immediately, Switzerland's central bank said in a brief statement. Vice chairman Thomas Jordan stepped in as chairman.
The move came just before a Swiss parliamentary committee was to grill Hildebrand behind closed doors about currency deals that raked in fat profits while his own central bank was actively working to lower the value of the Swiss franc. Switzerland has been in an uproar since news broke of the dollar swaps that netted Hildebrand and his wife Kashya, a former currency trader, tens of thousands of dollars in profits last year. At an impromptu press conference in the Swiss capital of Bern, Hildebrand emphasized Monday how proud he was of his achievements and of working for financial institutions in Switzerland and international organizations such as the World Bank. "I would like to think I have been a damn good central banker," Hildebrand told reporters. "I deeply regret these mistakes as well as the entire situation." Last Thursday he broke weeks of silence over the deal to deny any breach of central bank rules and to announce that he was donating the profits to charity. Four days later, he was out of a job.
It was a shocking comedown for the man who a year ago had become the central bank's youngest-ever president and chairman at 47. The former champion national swimmer had transformed himself into a financial prodigy and a champion of Swiss banking, with one publication calling him a financial "rock star." "I personally advocated strongly and early for stricter capital requirements for the big banks," he declared Monday. "The policy of the central bank was a success in recent years." While still maintaining that he broke no central bank rules, Hildebrand said a central bank chairman must be viewed as beyond reproach and he could not prove that his wife carried out the currency transactions on Aug. 15 without his explicit consent.
"I cannot once and for all prove that it was as I said it was," he said. Hildebrand released e-mails, bank telephone records and an affidavit Monday showing he had previously told a client adviser that his wife was allowed to buy dollars. The documents say he learned of the trade a day after his wife bought around a half-million dollars just as the dollar hit a record low against the franc and two days before the Swiss National Bank flooded the market with francs. Hildebrand says he regrets not reversing the trade. The profits from it appeared to be almost 75,000 Swiss francs ($83,000), based on the amount he later donated to charity.
"The fact is: my word is my bond. I had no knowledge of my wife's transaction that day. Unfortunately, mistakes were made in connection with these transactions," he said.