Swiss Central Bank scandal grows despite enquiry clearance

Philipp Hildebrand, the governor of the Swiss National Bank (SNB), is embroiled in a growing furore after it was revealed that his wife Kashya sold SWF 500,000 in August, just days before the Swiss central bank intervened to hold down the appreciating currency with a cap of 1.20 to the euro.

According to a report in The Times newspaper in London, an anonymous whistleblower leaked details of transactions whereby Kashya Hildebrand used Swiss francs to buy US dollars on 15 August, three weeks before the SNB surprised currency markets with the announcement that it would do whatever was necessary to impose the minimum exchange rate.

The governor’s wife, a former foreign exchange trader who now runs an art gallery, is said to have netted a profit of SWF 60,000 francs (£41,000) from the trade. Philipp Hildebrand, one of three SNB governors, was appointed in 2003.

The SNB has subsequently criticised “unfounded rumours” about the Hildebrands’ conduct, according to The Times report. The central bank said the couple have co-operated fully with an independent inquiry, lead by PwC, into their dealings. It concluded no wrongdoing had taken place.

Separately, Swiss and UK-based Bank Sarasin issued a press release stating that an employee had illegally passed bank data to an external third party, and that the data concerned currency transactions by the family of Hildebrand.

The employee, who worked in IT support, admitted his criminal misconduct to the Bank yesterday, saying he disclosed documents relating to the transactions to a lawyer with close links to the Swiss People’s Party (Schweizerische Volkspartei, SVP). According to the employee, the lawyer then arranged a meeting with National Councillor Christoph Blocher, which took place on 11 November 2011.

The un-named employee presented himself to Zurich Cantonal Police on 1 January, Bank Sarasin said. His contract with the bank has been terminated “with immediate effect”.

“Bank Sarasin is extremely regretful about this incident and has apologized to the client for the considerable unpleasantness caused by the infringement of bank client confidentiality. The Bank condemns the misuse of confidential bank data for political purposes in the strongest possible terms,” the statement said.

It has also informed the Swiss Federal Financial Market Supervisory Authority, and said it reserves the right to take legal action.

Blocher, who has publicly campaigned to defend Swiss banking secrecy, said in an interview on local television that there were “times for speaking, and times for silence, and this is one of the latter.” The incident has led to growing calls in Swiss media for greater transparency of both SNB policies and operations, and the transactions of its top executives.

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