The chairman of the Swiss National Bank (SNB), Philipp Hildebrand, has resigned with immediate effect.
It follows revelations his wife Kashya bought $504,000 (£323,024) in August, three weeks before the central bank intervened to cap the Swiss franc.He told a news conference he had "no knowledge" of his wife's transaction, which she later made a profit on.
The SNB said last week that Mr Hildebrand's wife had broken no rules by making the currency trades.
According to an investigation carried out by accountants PricewaterhouseCoopers (PwC) on the bank's orders, Mrs Hildebrand bought $504,000 on 15 August because she wanted to have half of the family's assets in US dollars.
In early September, the central bank intervened to try to weaken the strong franc.
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Central bank governors are the world's great unelected economic powers - setting interest rates, bossing banks, trying to curb inflation and maintain economic stability.
So they are supposed to be beyond reproach, never once thinking of their own wealth, only that of their respective nations.
That's is why it was so embarrassing for the Swiss central bank governor, Philipp Hildebrand, that his wife made a SFR 75,000 profit from buying dollars ahead of a decision by her husband to stem a rise in the Swiss currency.
He has quit - not because this former hedge fund manager was involved in the transaction, but because (he says) he can't prove beyond a shadow of doubt that he wasn't.
"The moment a governor gets the impression that he doesn't have full credibility anymore, he needs to resign," said Mr Hildebrand.
His departure will be seen as unfortunate by his British counterparts, because he was seen as one of their rare and important allies in international negotiations to strengthen banks.
Analysis
So they are supposed to be beyond reproach, never once thinking of their own wealth, only that of their respective nations.
That's is why it was so embarrassing for the Swiss central bank governor, Philipp Hildebrand, that his wife made a SFR 75,000 profit from buying dollars ahead of a decision by her husband to stem a rise in the Swiss currency.
He has quit - not because this former hedge fund manager was involved in the transaction, but because (he says) he can't prove beyond a shadow of doubt that he wasn't.
"The moment a governor gets the impression that he doesn't have full credibility anymore, he needs to resign," said Mr Hildebrand.
His departure will be seen as unfortunate by his British counterparts, because he was seen as one of their rare and important allies in international negotiations to strengthen banks.
That meant that four weeks later, when the family sold $516,000, converting it back into Swiss francs in order to buy a new property in Switzerland, they made a profit on the transaction. That was because the franc had fallen against the dollar in that time.
Speaking at a press conference in Berne, Mr Hildebrand said: "I have come to the conclusion it is not possible to provide conclusive and final evidence that my wife did initiate the transaction without my knowledge.He added: "I would like to think I have been a damn good central banker.
"I personally advocated strongly and early for stricter capital requirements for the big banks," he added. "The policy of the central bank was a success in recent years."
The Swiss National Bank cleared Mr Hildebrand of any wrongdoing in a report in late December.
This report, which detailed his wife's dealings, was published last week as new allegations surfaced.
The Swiss weekly magazine Weltwoche alleges Mr Hildebrand personally authorised foreign exchange dealings using his personal account three weeks before, and three weeks after Switzerland introduced a currency cap.
The Swiss National Bank said it will continue to defend "with the utmost determination" the exchange rate floor of 1.20 francs a euro.
It added it "regretted the decision and the circumstances" that led to Mr Hildebrand to step down as chairman.
Tony Nyman, an analyst at Informa Global Markets, said Mr Hildebrand's position was "almost untenable and so it has proved".
"The Swiss franc has actually gained on the news possibly due to hopes of increased integrity ahead, but also market positioning too," he said.
"Once the news gets digested, we do not expect a lasting impact on the franc from the news, however."
taken from http://www.bbc.co.uk/news/business-16472416
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