Home Business News Swiss central bank chief won't quit over scandal of wife's massive currency trade

Swiss central bank chief won't quit over scandal of wife's massive currency trade

by LLB Editor
6th Jan 12 9:39 am

The head of the Swiss central bank has dismissed suggestions he should resign after his wife made a currency trade from their joint account weeks before he capped the soaring Swiss franc.

Swiss National Bank chairman Philipp Hildebrand was leading efforts to lower the Swiss franc’s value when his wife ordered a currency deal with US dollars. Hildebrand said his only mistake was letting his wife carry out the particularly sensitive transaction from their joint account.

The former champion swimmer insisted he followed the central bank’s internal rules when he and his wife ordered the currency trade. “I am not aware of having committed any legal error,” he said. “But I understand that the public is also asking moral questions.”

However, Hildebrand acknowledged that the three currency swaps – worth a total of more than $2m – could be misinterpreted and damage his reputation. The most sensitive of the three deals was carried out by his wife Kashya.

Hildebrand said he would remain in his position as long as he retained the support of the board and the Swiss authorities. He said: “Resignation is not an issue for me.”

The bank chief has been publicly backed by the central bank and the Swiss government, citing an external audit last month which cleared Hildebrand of wrongdoing.

Hildebrand expressed regret about failing to reverse a significant dollar purchase by his wife on August 15. When asked why he did not reverse the deal, he said: “Let’s just say my wife has a strong personality.”

Kashya, a former currency trader, allegedly purchased more than $500m in August, effectively speculating against the Swiss franc’s value. She did not inform her husband, who is responsible for overseeing the franc’s stability.

The central bank increased the liquidity of the franc two days after the deal, lifting the value of the dollar and causing auditors to call the transactions “delicate”. Hildebrand said his wife did not know of the central bank’s imminent policy decision.

Kashya told Swiss television she invested in the dollar “because it was at a record low and almost laughably cheap.”

Hildebrand said he donated all profits he made from his currency deals to a Swiss charitable organisation. He said he would hold discussions with the central bank’s board on how the rules for officials’ private business deals above 20,000 francs could be improved.

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