SNB boss under scrutiny over wife's currency deals

AP News
Posted: Jan 03, 2012 11:35 AM
SNB boss under scrutiny over wife's currency deals

The president of the Swiss National Bank has come under fire over a currency deal that saw his wife profit handsomely from the central bank's decision to depress the value of the franc _ but the bank has decided she did not break its secret rules against insider trading.

The case came to light when the SNB issued an unprompted statement Dec. 23 declaring that "rumors" of wrongdoing by President Philipp Hildebrand were unfounded _ a statement that left many questions unanswered.

Citing an unnamed informant, Zurich daily Blick reported Tuesday that his wife Kashya Hildebrand had bought more than half a million U.S. dollars on Aug. 15, before selling them again Oct. 12 at a profit of 61,000 francs ($65,000). The figures are similar to those reported by the respected Neue Zuercher Zeitung paper.

On Sept. 6, the Swiss National Bank set the minimum exchange rate of the euro at 1.20 francs _ a surprise move that caused the value of the franc to instantly drop about 8 percent against other major currencies including the dollar.

The Swiss National Bank confirmed that Kashya Hildebrand, a former currency trader who now runs an art gallery in Zurich, bought an unspecified amount of U.S. dollars for herself and her daughter Aug. 15. The central bank declined to say whether she sold them for a profit, but declared that the bank's board concluded Dec. 22 there had been no inappropriate transactions nor any abuse of privileged information.

An SNB spokeswoman, however, declined Tuesday to provide a copy of the rules governing personal deals by senior directors of the bank. "These are internal regulations that aren't public," Silvia Oppliger told The Associated Press.

Media commentators and lawmakers across the political spectrum called Tuesday for greater transparency from the bank and from Hildebrand, a dashing 48-year-old whose unblemished image is considered crucial to the credibility of Switzerland's small but powerful central bank.

"Was the Hildebrands' dollar deal really OK?" headlined Blick, while lawmaker Philipp Mueller of the pro-business Free Democratic Party suggested that Hildebrand's wife should now declare all of her currency deals over the past year.

"The federal cabinet would do well to uncover everything," Green Party lawmaker Daniel Vischer told the DRS radio station. Susanne Leutenegger Oberholzer of the Social Democratic Party said it was unjustifiable for the SNB to keep its guidelines on insider trading secret.

Considerable media attention has also focused on who might have leaked the Hildebrands' confidential bank information, with several newspapers pointing the finger at former Justice Minister Christoph Blocher. The billionaire businessman, a leading figure in the nationalist Swiss People's Party, has repeatedly criticized Hildebrand's management of the central bank.

Blocher has declined to comment on the case.

(This version corrects exchange rate in paragraph 4.)