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Swiss Central Bank Chief Steps Down Over Currency Trade Controversy

Swiss Central Bank Chief Steps Down Over Currency Trade Controversy
1/9/2012 10:47 AM ET

Swiss National Bank Governor Philipp Hildebrand stepped down from his post amid a scandal over a controversial currency deal made by his wife that threatened to undermine the credibility of the central bank.

"Effective immediately, Philipp Hildebrand is resigning from his office as Chairman of the Governing Board of the Swiss National Bank," the bank said in a statement on Monday.

The announcement came as Hildebrand was going to face another round of questioning by lawmakers.

In a statement, the Governing Board of the Swiss National Bank said it regrets Hildebrand's decision and the circumstances that gave rise to it.

As the controversy regarding the currency trades by Hildebrand's wife Kashya brewed, the Bank Council of the Swiss National Bank met on January 7th and decided on measures to tighten control. The bank will review the rules governing transactions by the Governing Board members.

It was also decided that all bank transactions by the Governing Board members between January 1, 2009 and December 31, 2011 will be reviewed by external auditors.

Kashya Hildebrand, a former hedge fund employee who now runs a Zurich art gallery, bought more than half a million U.S. dollars on August 15th, apparently without Hildebrand's knowledge.

The move came just three weeks ahead of the SNB's crucial decision to cap the rise of the Swiss franc, fixing the minimum rate at CHF1.20 per euro.

The policymaker was set to submit e-mails to a parliamentary committee today that were expected to show that his wife acted alone in the deal, Swiss media reports said.

Bank Sarasin earlier fired one of its employees for leaking the data to the Swiss People's Party, which has been seeking Hildebrand's resignation.

Hildebrand, 48, joined the SNB in 2003 and became the Chairman of the Governing Board in January 2010. Previously, he was the chief investment officer at Union Bancaire Privee in Geneva and Vontobel Group in Zurich.

Economists expect Hildebrand's resignation to have only a momentary impact on the Swiss franc.

The Bank Council of the SNB said Vice Chairman Thomas Jordan will hold the position of Chairman of the SNB Governing Board for the time being.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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