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Swiss bank governor in forex scandal

Thursday 5 January 2012 - by Karina Whalley


The Swiss central bank governor has been swept up in a political scandal amid reports of his wife's foreign exchange transactions.

Kashya Hildebrand broke her silence on Tuesday evening and told a Swiss television station that her husband, Philipp Hildebrand's, political opponents were trying to undermine the Swiss National Bank by creating a media frenzy around her private dealings.

She confirmed her purchase of around $530,000 (€412,600) in August when she took advantage of the very strong Swiss Franc.

"My interest in the dollar purchase was motivated by the fact that it was at a record low and was almost ridiculously cheap," Swiss Television's 10 vor 10 program cited Mrs Hildebrand as saying.

Only after the Swiss National Bank had set a cap on the rising currency, did she convert the dollars back into local currency, making a profit of about 50,000 francs ($53,300/€41,500).

A former foreign exchange trader, Kashya Hildebrand has worked in finance for 15 years including a stint at the large hedge fund Moore Capital.


An IT employee at Bank Sarasin where the Hildebrands hold accounts, confessed on Tuesday to leaking information about the currency transaction to a lawyer close to the conservative Swiss People's Party.

According to Bank Sarasin who has now fired the IT worker, the lawyer then met with Christoph Blocher, the Swiss People's Party deputy chairman in November.

Blocher, who has repeatedly criticised Mr Hildebrand in the past for his policies as SNB head, appears to have broken Swiss privacy rules and passed the confidential information to the government.

But Mr Hildebrand, who has been the central bank's head since 2003 and was also recently appointed vice chairman of the Financial Stability Board, was cleared of any insider trading after an investigation.

The SNB said on 23 December: "The rumours made against the president of the branch [Philipp Hildebrand] proved unfounded. No illegal transaction had been carried out, nor had any insider information been exploited."

Blocher declined to comment and said on Swiss TV, according to the FT: "[There are] times for speaking and times for silence and this is one of the latter."



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