Top Swiss banker felled by scandal

Elizabeth Fournier
EMBATTLED Swiss National Bank governor Philipp Hildebrand yesterday resigned from his role with immediate effect, succumbing to weeks of pressure from politicians and the media over controversial currency transactions made by his wife.

Hildebrand admitted yesterday he could not provide “conclusive and final evidence” that Kashya Hildebrand had bought half a million US dollars in Swiss francs on 15 August without his knowledge, just weeks before the SNB revealed a peg for the booming currency.

Announcing his resignation at a press conference in Bern, Hildebrand told reporters he had stepped down to protect the integrity of his employer. “I deeply regret these mistakes as well as the entire situation… I am confident that the SNB will emerge stronger from what are admittedly exceptionally difficult circumstances,” he said.

Hildebrand had been due to face a grilling by opposition politicians at a closed meeting of Switzerland’s parliamentary committee for economic affairs and taxation yesterday afternoon, but the appearance was cancelled after the SNB issued a lunchtime alert announcing that he had quit.

A storm has been brewing around the former hedgie since it emerged over Christmas that details of forex trades from his personal accounts had been leaked to members of the Swiss People’s Party by an employee at his private bank, Sarasin.

Documents showed a £50,000 profit had been made on a purchase of US dollars made by Mrs Hildebrand just weeks before the franc was pegged to the euro, though she has denied any prior knowledge of the policy change.

Despite Hildebrand continuing to deny all allegations of insider trading, pressure on him had been mounting over the weekend after embarrassing revelations in a magazine favoured by opposition politicians. Just last Thursday he maintained he would remain at the SNB “so long as I have the confidence of the government and the bank council”.

Following the announcement, the Swiss franc spiked to a four-month high against the euro, but quickly fell back as analysts said the shake-up at the country’s central bank was unlikely to affect monetary policy.

Colleagues were quick to rally round the ex-hedge fund trader, with Bank of England governor Sir Mervyn King praising Hildebrand for his “total integrity, extraordinary ability and, most important of all, courage”.

Hildebrand also resigned yesterday from the Financial Stability Board, where he had been vice chairman.

The SNB said it regretted Hildebrand’s decision and the circumstances that led to it.