Insider deal?

Philipp Hildebrand, head of the Swiss National Bank (SNB), was questioned on Monday by a parliamentary committee over his involvement in an alleged insider trading scandal. The hearing was held behind closed doors.

Swiss President Eveline Widmer-Schlumpf stood by Hildebrand last week and said he should not resign.

"We would lose a [central bank] president who has undisputedly done excellent work, has a good network, and could be very useful to Switzerland," said Widmer-Schlumpf on Swiss television late Friday.

Press reports claim that Hildebrand's wife Kashya profited after buying $504,000 (396,000 euros) last August, just weeks before an intervention by the SNB to halt the rise of the franc. The couple profited handsomely when the dollar's value soared against the Swiss franc.

The 48-year-old acknowledged that three private banking deals made by him and his wife could be misinterpreted, but he said his only mistake was to let his wife go through with one particularly sensitive transaction. Hildebrand said he has since donated the personal profits to charity.

SNB-chief denies breaking rules

Hildebrand held a news conference last week in which he denied any wrongdoing. He also rebuffed calls to resign. He has vowed to boost transparency in the central bank.

"What was positive about what Hildebrand did, and this was reflected in the newspapers, is that he said he was sorry about what happened," Swiss daily Tages-Anzeiger journalist Arthur Rutishauser told Deutsche Welle. "The negative thing is still the fact that the president of the SNB did trade with dollars, or his wife did, so he still has a difficult standing here in Switzerland."

Hildebrand met his wife when they were both working for the same hedge fund. She holds dual American-Swiss citizenship. In interviews, Hildebrand has called his wife a "strong personality."

"What Hildebrand says is that he didn't make the transaction himself, it was his wife, and his wife didn't know exactly what they were going to do at the SNB. So it's his defense line," Rutishauser explained.

Political pressure

The scandal took a political turn with revelations that the government last month received Hildebrand's private banking documents from Christoph Blocher, chief of the conservative Swiss People's Party (UDC), the largest in the Federal Assembly. The party has called on Hildebrand to resign.

The details of the transactions were leaked by an employee at the Basel-based Bank Sarasin, who was concerned about the possibility of insider trading. A criminal investigation has opened into the conduct of the employee. One Sunday newspaper reported that he had attempted suicide this weekend.

An investigation by PricewaterhouseCoopers has cleared the couple of any wrongdoing, though the currency purchase was deemed "sensitive." SNB said they would hire an outside firm to audit all banking transactions carried out by managers since 2009.

Journalist Rutishauser thinks that Hildebrand will stay in office for now.

"If there is no new bad news, maybe he can survive. If there is anything, even a minor thing that is coming out now, that he lied, or that he didn't say the whole truth, then he has to leave office."

Author: Joanna Impey
Editor: Gabriel Borrud