Swiss central bank chief won’t resign over private dollar deals, regrets letting wife prevail
ZURICH – Switzerland’s central bank chief dismissed suggestions he should resign over profitable private currency deals Thursday, saying his only mistake was to let his American wife conduct a particularly sensitive transaction from their joint account.
Breaking his silence to counter a national uproar, Philipp Hildebrand said he followed the central bank’s internal rules when he and his wife ordered U.S. dollar swaps at the same time as he was spearheading efforts to lower the value of the Swiss franc.
“I am not aware of having committed any legal error,” Hildebrand told reporters at the Swiss National Bank’s headquarters in Zurich. “But I understand that the public is also asking moral questions.”
The former champion swimmer has come under pressure to reveal all details of the dollar deals and avert harm to Switzerland’s small but powerful central bank.
Hildebrand acknowledged that three dollar deals totalling more than $2 million – the most sensitive of which he said was conducted by his wife Kashya – could be misinterpreted and damage his reputation. But he insisted that he would stay on as head of the central bank as long as he had the support of the SNB’s board and Swiss authorities.
“Resignation is not an issue for me,” he said.
Both the central bank and the Swiss government have publicly backed Hildebrand, stating that an external audit in December had cleared him of wrongdoing.
Hildebrand said the only charge he would level against himself is that he failed to reverse his wife’s hefty dollar purchase on Aug. 15.
Asked why he didn’t do so, he responded: “Let’s just say my wife has a strong personality.”
Kashya Hildebrand, a former currency trader now running an art gallery in Zurich, allegedly bought more than half a million U.S. dollars on Aug. 15 – effectively speculating against the value of the franc. She did so without telling her husband, whose day job is to oversee the stability of the Swiss currency.
Two days later the central bank increased the liquidity of the franc, thereby lifting the value of the dollar, prompting auditors to describe the transactions as “delicate.”
Hildebrand said his wife was unaware of the central bank’s imminent policy decision.
Kashya Hildebrand, a Pakistan-born U.S. citizen, told Swiss television Tuesday that she invested in the dollar “because it was at a record low and almost laughably cheap.”
Asked whether he would release evidence showing that he wasn’t aware of his wife’s plans, Hildebrand said he didn’t rule it out but at this stage the public would have to take his word for it.
Two other transactions – the purchase of over $1.1 million dollars in March and the sale of some $500,000 in October, three weeks after the SNB set the minimum value of the euro at 1.20 francs – didn’t break central bank rules because they were more than six months apart.
Critics say the central bank chief and his wife acted at best naively.
“That those close to the central bank chief are making currency deals is an absolute no-go,” Christoph Moergeli, a senior figure in the Swiss People’s Party, told Swiss TV. “You don’t even need to put that in writing.”
Hildebrand told reporters he had donated all profits made from his currency deals to a Swiss charitable organization, and would discuss with the central bank’s board how to improve its rules for officials’ private business deals above 20,000 francs.
But he said the Swiss central bank’s rules already meet European standards.
Germany’s influential Handelsblatt newspaper questioned this.
“If Hildebrand had been the guardian of the euro, and not the franc, then the European Central Bank’s rules would have given the 48-year-old no other option but to resign,” the paper wrote.