January 10, 2012 / 8:15 AM / 6 years ago

UPDATE 1-Swiss cbank seeks new blood after chief quits

* Swiss govt expected to confirm Jordan as new SNB boss

* Ex-boss Roth: Hildebrand “error of judgement” was serious

* SNB council starts search for new board member on Tuesday

* Upheaval not seen affecting monetary policy

By Catherine Bosley

ZURICH, Jan 10 (Reuters) - The Swiss National Bank starts the search for a new board member on Tuesday after the resignation of Philipp Hildebrand as chairman over a controversial currency trade made by his wife.

Hildebrand’s wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs ($418,000) worth of dollars on Aug. 15, three weeks before her husband oversaw steps to cap the rise of the safe-haven franc. She later sold the dollars at a higher rate.

Jean-Pierre Roth, the former SNB chairman who handed over to Hildebrand two years ago, said his successor should have reversed the trade as soon as he became aware of it.

”He knew that several days later he would change monetary policy which would affect the franc exchange rate,“ Roth told daily Le Temps. ”He made a serious error of judgement unfortunately and today he must pay the consequences.

“In a very difficult economic and monetary environment, the credibility of the SNB has been hurt, the bank is weakened.”

Emails between Kashya, Hildebrand and their Sarasin bank client advisor Felix Scheuber released by the SNB on Monday showed the central banker had been aware of the dollar transaction but left it unclear whether he had approved it.

After examining the email exchange, the SNB’s advisory council indicated to Hildebrand on Saturday that his position was no longer tenable, Swiss newspapers reported on Tuesday.


The SNB’s supervisory council said on Monday Vice Chairman Thomas Jordan, who joined the SNB in 1997, would take over as chairman for the time being, with the government expected to confirm him soon in the postion permanently.

Jordan, who enjoys a solid reputation, heads the SNB’s regulatory department, which is pushing for flagship banks UBS and Credit Suisse to firm up their balance sheets.

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