Swiss bank chief rejects calls to stand down

Philipp Hildebrand, the Swiss National Bank chairman caught in a political storm over allegations his wife shorted the Swiss franc just days before intervention from the central bank, has defended the transactions.

Hildebrand broke his silence after mounting calls for him to quit over the scandal, arguing he was unaware of the transactions carried out by his wife, adding that no legal breaches had occurred.

Hildebrand said transactions carried out by his wife in August – when $500,000 was purchased for 400,000 Swiss francs in total – had been investigated fully by the Swiss Federal Audit Office, with no “inadmissible transactions” carried out and no “misuse of privileged information’ taking place.

He added: “I want to say this perfectly clearly: I am not aware of any legal wrongdoing on my part.”

Hildebrand, who said he will now take steps to improve transparency at the bank, said the only thing he could criticise himself for was not reversing the transactions made by his wife back in August, after he learned about the trade the next day.

“With hindsight, if I reproach myself for anything, it is that I allowed the transaction requested by my wife, who is not informed of monetary policy decisions, to stand rather than acting more decisively and ordering that all foreign currency transactions of 15 August 2011 be reversed.”

He added he had donated 75,000 francs to Swiss Mountain Aid before Christmas  to rectify any “unfair pecuniary advantage” that may have occurred.

Hildebrand, who called the leaking of details of his family’s banking activity in pursuit of political goals “damaging” to Switzerland’s interests, also outlined a number of steps he and his colleagues will now take to improve transparency at the bank.

He proposed members of the SNB’s governing board should be required to submit all financial transactions worth more than 20,000 francs to the external and internal auditors, with all such transactions published for shareholders.

External auditors should also have unrestricted access to all the account details of governing board members.

Other banking issues

Elsewhere in Europe, Denmark’s Børsen reports economist views that more banks in the country will be forced to merge or shut through 2012.

Some 40 economists were surveyed for the results, which is published just as Italy’s Unicredit lost about a third of its market value in two days over fears it will not be able to meet the cash call required to meet tougher European Banking Authority rules on capitalisation.

last year three banks – Amagerbanken, Fjordbank Mors and Max Bank – were forced to hand over their businesses to the Finansiel Stabilitet, the state controlled organisation tasked with running off bankrupt financial institutions.

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