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Wife's dollar trade puts pressure on Swiss bank head

Last Updated: Wednesday, January 4, 2012 - 22:26

Zurich: Swiss central bank head Philipp Hildebrand came under pressure on Wednesday following revelations of sensitively timed currency trades by his wife and the sacking of a whistleblower who passed details to the lawyer of a political adversary.

The employee of Bank Sarasin was fired for leaking data showing that Hildebrand's wife Kashya, a former trader who owns a Zurich art gallery, bought dollars three weeks before the central bank capped the Swiss franc. The case goes to the heart of Switzerland's bank secrecy.

Kashya told Swiss television she "felt good" about the deal last August that local tabloid Blick reported had yielded a 60,000 Swiss franc (USD 64,400) profit on a 500,000 franc trade.

"What motivated me to buy dollars was the fact that it was at a record low and was almost ridiculously cheap," she was quoted as saying on Swiss television. "As I have worked in the financial and banking industry for over 15 year and always observe the markets, I felt at ease with this transaction."

The Swiss National Bank has already investigated Kashya's trade and said it did not infringe internal rules. On Wednesday it went a step further, releasing an internal document and a report by auditor PWC that it said showed inaccuracies in media accounts.

But in a country that has been plagued by scandals linked to a banking industry that has helped the world's wealthy hide from the taxman, politicians called on the central bank to divulge its internal codes of conduct.

As rumours started swirling about potential legal suits, politicians called on Philipp Hildebrand and the bank to clarify what had happened. One central bank official called Kashya's trade "a lot for a weekend shopping trip to New York."

"It may well be completely above board but nevertheless it leaves a bitter taste in the mouth," the official said.

Bank Sarasin, which said it had fired an IT staffer for the leak, apologised for the "considerable unpleasantness" caused by the transmission of the information to a lawyer close to Hildebrand's political adversary Christoph Blocher. The employee gave himself up to the police on Sunday.

"The bank condemns the misuse of confidential bank data for political purposes in the strongest possible terms," it said. The latest twist comes as US prosecutors accused three Swiss bankers of conspiring with wealthy US taxpayers to hide more than USD 1.2 billion in assets from tax authorities.

Sources briefed on the matter told media in the United States that the three worked for Wegelin & Co, one of Switzerland's oldest private banks.

Bureau Report

First Published: Wednesday, January 4, 2012 - 22:26
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