Swiss Central Banker Resigns Over Private Currency Deal

The embattled head of the Swiss National Bank, Philipp Hildebrand, has announced his resignation amid a controversy over private currency deals.

His resignation, announced on Monday, is with immediate effect according to the central bank. Hildebrand explained his decision at a news conference in Bern, saying he could not prove that he had been unaware of his wife’s financial transactions.

The statement came just hours before Hildebrand, as well as the president of the SNB board, Hansueli Raggenbass, and the finance minister, Eveline Widmer-Schlumpf, were scheduled to attend a meeting of a parliamentary committee.

Hildebrand said that stepping down filled him with sadness, and that the job had been an extraordinary privilege.

“I would like to think I have been a damn good central banker,” Hildebrand told reporters. “I personally advocated strongly and early for stricter capital requirements for the big banks,” he added. “The policy of the central bank was a success in recent years.”

The bank, for its part, thanked Hildebrand for his excellent service and said it was losing a wonderful central banker with countless international connections.

The SNB’s supervisory council said in a statement that Vice Chairman Thomas Jordan, who joined the bank in 1997, would take over as interim chairman. The free position on the governing board will be filled on a permanent basis as soon as possible.

The Swiss government also praised Hildebrand’s work.

“As head of the Governing Board of the Swiss National Bank, Mr Hildebrand demonstrated his great expertise in the field of monetary policy, particularly in this period of crisis. We express our thanks to Mr Hildebrand for his strong commitment,” said the government in a statement on Monday.

Credibility needed

Earlier, Hildebrand had argued that the currency transactions had been carried out by his wife without his explicit consent, and they did not breach any regulations. But by Monday he admitted that he could not prove this, pointing out that a bank head had to be seen as credible.

“I cannot once and for all prove that it was as I said it was,” Hildebrand said.

The government has repeatedly backed Hildebrand and Widmer-Schlumpf had called for a thorough investigation.

The SNB board on Saturday announced a tightening of internal good governance rules for private currency deals.

The rightwing Swiss People’s Party had demanded Hildebrand’s resignation, as well as a wide-ranging parliamentary inquiry and a special session of parliament.

No other major party has supported the demands. However, the bank board has been criticised for apparently neglecting its role as supervisory authority.

The controversy was triggered by an employee of a commercial bank last month. He copied documents which ended up in the hands of senior members of the People’s Party.

Who is he?

In 2010, 47-year-old Philip Hildebrand became the youngest-ever chairman of the SNB.

But before reaching the pinnacle of Swiss banking, he enjoyed an unusually unSwiss career, studying in Toronto, Oxford, Harvard and Geneva, among other places, and working for employers including the World Economic Forum in Geneva and Moore Capital Management in London.

Hildebrand was an imposing presence – not least thanks to his 1.94-metre athletic frame (he was a two-time national swimming champion). In his office at the SNB was a portrait of Muhammed Ali, whom he respected not only for his skills in the ring but also for his courage in pushing for civil rights in the 1960s.

But despite Hildebrand’s elegance, aplomb and charm – which some have said can border on manipulation – the majority of the Swiss media never considered him a showman. He was always seen as a discreet, modest and cool-headed doer.

(With input from Urs Geiser)