President of the Swiss National Bank Philipp Hildebrand during a press conference in Zurich on January 5, 2012.
- Philipp Hildebrand has resigned as chairman of the Swiss National Bank
- Hildebrand had come under pressure following a scandal surrounding his wife’s currency transactions
- Hildebrand had been due to face a grilling by Swiss legislators
Zurich (Financial Times) — Philipp Hildebrand has resigned as chairman of the Swiss National Bank, following allegations that his wife profited from currency transactions just weeks before the central bank introduced a price target to weaken the Swiss franc.
“I came to the conclusion that it’s not possible for me to deliver a definite proof that my wife requested the currency transaction without my knowledge,” Hildebrand said. “Unfortunately, mistakes were made around this transaction,” he told reporters at a press conference in Bern on Monday after announcing his decision to quit.
The move came shortly before a meeting of the economics committee of the lower chamber of the Swiss parliament, at which the central bank chairman had been expected to make a spirited defence against allegations over his wife’s currency transactions.
The announcement followed a marked shift in sentiment in Mr Hildebrand’s favour in recent days, after allegations in a rightwing news magazine based on information taken from his family’s bank accounts.
It appeared on Monday that further information may have become available, or that gaps may have emerged in Mr Hildebrand’s position.
Swiss National Bank head quits
The allegations followed revelations that Kashya Hildebrand, the central bank chairman’s wife, on August 15 bought $500,000 worth of dollars. The purchase was made just weeks before the SNB imposed a ceiling on the steeply appreciating Swiss franc, sending the currency down sharply. In early October, an almost equal amount of dollars were sold, netting an approximate SFr75,000 profit.
The Swiss franc rose swiftly to a four-month high on Monday following the news. It later fell back as analysts said the resignation of Mr Hildebrand was unlikely to affect the Swiss National Bank’s commitment to weaken the franc.
Markets have so far not tested the SNB’s commitment to buy euros to weaken the franc if it rises above SFr1.20 against the single currency. The euro is currently worth just over SFr1.21.
“I continue to see the 1.20 floor as 100 per cent credible,” said Geoffrey Kendrick, currency analyst at Nomura. “The small dip in the euro vs Swiss franc on the announcement was a buying opportunity.”
At a recent news conference Mr Hildebrand said the currency transaction had followed the sale of a family ski chalet in early 2011. He maintained he had been unaware of his wife’s August currency sale at the time but said he reported it to the SNB’s chief lawyer the day after he was told about it.
Separate enquiries by the Swiss government, which had been informed of the allegations, and the SNB revealed Mr Hildebrand had not broken the SNB’s rules on financial transactions by senior executives.
On Saturday evening, the SNB’s supervisory body said it would appoint outside advisers to revise the rules, while immediately obliging executives to report transactions of more than SFr20,000 and open their bank details to outside scrutiny.
Mr Hildebrand is expected to be succeeded, at least on an interim basis, by Thomas Jordan, the SNB’s number two. Mr Jordan is a respected former academic economist who initially worked as Mr Hildebrand’s deputy.