FT: Swiss Bank chief in row over wife’s trades

[sufaud]

Financial Times
January 4, 2012 12:35 pm

Swiss Bank chief in row over wife’s trades

By Haig Simonian in Zurich

The wife of Switzerland’s central bank governor has accused critics of
trying to destabilise the Swiss National Bank by focusing on her
family’s private financial dealings.

Kashya Hildebrand, a former foreign exchange trader, on Tuesday night
broke her silence to tell Swiss German television about the
controversial foreign exchange transactions that have prompted a Swiss
media storm.

She confirmed that last summer she used the unprecedented weakness of
the dollar against the Swiss franc to buy $500,000, having had some
capital at her disposal following the sale of a property.

The dollars were later sold back into francs, but only after the Swiss
National Bank set a floor for the soaring national currency, netting
Mrs Hildebrand a handsome profit.

Mrs Hildebrand, who was not immediately available for comment, said
she had spotted the opportunity because of her many years as a
financial specialist. The couple met in New York, where both worked
for Moore Capital, the big hedge fund.

The Swiss National Bank has defended the transactions, which it says
had been vetted by its supervisory bodies as well as an external
auditor and were deemed to have met internal policies.

Mrs Hildebrand tried to shift attention to her husband’s critics.
Although she did not mention him by name, her focus was on Christoph
Blocher, guiding light of the ultranationalist Swiss People’s party,
who had emerged as central actor in the affair.

Bank Sarasin, the Swiss private bank where the Hildebrands hold their
accounts, on Tuesday night revealed it had sacked an information
technology employee after he admitted breaking Swiss bank secrecy by
revealing details of Mrs Hildebrand’s transactions to a lawyer close
to the Swiss People’s party.

The lawyer then arranged a meeting, at which Mr Blocher was present.
Mr Blocher then appears to have passed the allegations to Swiss
government circles in Bern. An ensuing Swiss government investigation
into Mr Hildebrand revealed no wrongdoing.

The affair has cast Mr Blocher, an ardent defender of Swiss bank
secrecy, in a highly unfavourable light. He has declined to comment,
saying on Swiss television this week that there were, “times for
speaking, and times for silence, and this is one of the latter.”

However, the incident has also raised questions about both Mrs
Hildebrand and the SNB’s policies.

On returning to Switzerland, where her husband Philipp was appointed
one of the bank’s three governors in 2003, Mrs Hildebrand opened an
art gallery and dealership specialising in Asian art and presumably
required regular foreign exchange dealings to pursue her business.
However, the transactions in question appear to have been of a
private, and not commercial, nature.

Swiss media reports have also revealed the opacity of the SNB’s
policies on financial transactions by top executives. Not only do such
dealings not need to be made public, the SNB’s code of ethics is
secret, its contents known only to a small circle.

.http://www.ft.com/cms/s/0/0400fd66-36c9-11e1-b741-00144feabdc0.html