Swiss right presses central bank chief to resign

AP News
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Posted: Jan 06, 2012 11:02 AM
Swiss right presses central bank chief to resign

Switzerland's biggest political party called Friday for the country's central bank chief to resign, saying Philipp Hildebrand broke the law by conducting private currency deals while he was leading efforts to soften the Swiss franc.

The nationalist Swiss People's Party, which won more than a quarter of the vote in last year's election, said Hildebrand was "no longer tenable" as president of the central bank. The demands came a day after the 48-year-old banker broke his silence to deny wrongdoing and dismiss calls for his resignation.

"The best thing would be if he himself took the consequences," the party's deputy general-secretary, Silvia Baer, told The Associated Press on Friday. "Otherwise it's up to the appropriate oversight authorities to recall him."

The Swiss National Bank acts independently of the government, but its president is elected by the government's seven-member Cabinet, which can also remove him or her following a request by the central bank's supervisory council.

Hildebrand, whose six-year term began Jan 1., 2010, is considered a pillar of the central bank's success in steering Switzerland through the worst of the global credit crunch. But his decision to buy and sell large amounts of U.S. dollars at a time when his own central bank was making major monetary decisions about the Swiss franc has led to accusations of naivety and possibly insider trading.

The former swimming champion and hedge fund manager on Thursday denied breaking the bank's internal rules, saying his only mistake was not to reverse a particularly sensitive transaction conducted by his American wife from their joint account.

Still, Hildebrand acknowledged the public had raised "moral questions" about his behavior and pledged to review the bank's rules on personal transactions.

A senior figure in the People's Party said that isn't enough. Lawmaker Christoph Blocher has demanded a parliamentary inquiry into the whole affair.

The billionaire businessman, who first brought leaked statements of Hildebrand's dollar deals to the attention of the government, said he expected further questionable transactions to surface in a probe.

A parliamentary inquiry would prolong the focus on Hildebrand's personal finances at a time when he is trying to keep Switzerland from being drawn into the European debt crisis that is crippling its neighbors.

Under Hildebrand's leadership, the Swiss central bank last year took several steps to halt the rise of the franc against the euro, including setting a minimum exchange rate for the euro of 1.20 Swiss francs. That also pushed up the dollar just weeks after Hildebrand's wife Kashya had bought some $504,000.

In early October, the couple sold a similar amount of dollars for what appeared to be a profit of tens of thousands of francs (dollars). Hildebrand said he has since donated those profit to a Swiss charitable organization.

Without naming Blocher, Hildebrand told reporters Thursday that those now engaged in "attacks on me as an individual" were harming the interests of Switzerland. Hildebrand said he would talk with his lawyer on whether to take legal steps against those involved in leaking details of his personal account at the exclusive Basel-based bank Sarasin.

Zurich prosecutors said Friday they have opened an investigation into a possible breach of banking secrecy by a former Sarasin employee.

The bank said Friday it was also seeking a criminal probe against those who encouraged the unnamed employee and received copies of Hildebrand's confidential documents.