Of Special Interest


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6th January 2012

Swiss National Bank president controversy

Philipp Hildebrand, President of the Swiss National Bank, is at the centre of controversy following foreign exchange transactions allegedly carried out by his wife. Kashya Hildebrand is said to have bought US dollars just before the Swiss central bank stepped in to force the value of the Swiss Frank down and then shortly after switched the money back to Swiss Franks netting a CHF 60,000 (~€49,000 £41,000 $63,700 ¥4.9m 6 Y401,000) profit.

Kashya previously worked for Moore Capital, a hedge fund, and is therefore financially sophisticated - and the opportunity was one that many with spare cash took advantage of. However there are some complications with the story. First that in a TV interview Kashya said that she bought the dollars for her art gallery business as much of the business is transacted in dollars - and yet within a few days she had converted most back to Swiss Franks. A second, and if substantiated, much more serious problem comes from Weltwoche (The World Week) who claim evidence that it was Philipp who personally ordered the deals and not Kashya. They filled most of the front page with items on Hildebrand and why he should resign.

The incident further damages the Swiss approach to absolute bank secrecy. A Bank Sarasin employee leaked details of the transactions to a Swiss opposition party leader. He was fired and is likely to face criminal prosecution for breaking the bank secrecy laws. Weltwoche state its source as a lawyer representing a Bank Sarasin employee, widely assumed to be the same individual.