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Swiss lawmakers to grill central bank chief today
GENEVA -- A Swiss parliamentary committee plans to hold a hearing today with central bank chief Philipp Hildebrand behind closed doors in a bid to get answers about private currency deals he engaged in while he was leading efforts to soften the Swiss franc.
Hildebrand broke weeks of silence Thursday to deny breaching central bank rules, amid ongoing public unease over the dollar swaps that netted his family tens of thousands of dollars last year.
The 48-year-old acknowledged that three dollar deals totaling more than $2 million could be misinterpreted, but said his only mistake was to let his wife go through with one particularly sensitive transaction that occurred two days before the central bank increased liquidity of the franc. Hildebrand said he has since donated the profits to charity.
Lawmakers on the Committees for Economic Affairs and Taxation said that today's hearing will be confidential but reporters will be briefed afterward.
"Doing it in public would mean that those who are being heard wouldn't say what we want to hear," said Philipp Mueller of the pro-business Free Democratic Party.
Confidential committee hearings are the norm in Switzerland, unlike in the United States and Britain where legislative business is commonly conducted in public.
Mueller said lawmakers would be examining questions such as whether Hildebrand and his wife traded currency from accounts other than the one at Basel-based Bank Sarasin, details of which were leaked by an IT support employee apparently concerned about the possibility of insider trading.
The committee will also discuss whether family members need to be covered by the central bank's rules on staff conduct, and whether Switzerland's insider trading laws should be expanded to include currency speculation, Mueller said.
Another committee member, Corrado Pardini of the Social Democratic Party, said the Swiss National Bank's decision to let its regular auditors, PricewaterhouseCoopers, review Hildebrand's conduct would also be discussed.
Critics have said the central bank's rules left considerable room for interpretation, and the verdict reached by the auditors made several assumptions that worked in Hildebrand's favor.
"The question of PwC's independence will be raised," Pardini said.
He said the committee expected Hildebrand and the president of the central bank council, its supervisory body, to look beyond the legal aspects of the affair.
"Mr. Hildebrand acknowledged making speculative transactions," said Pardini. "I think the general public has little sympathy for these transactions. It's not only a legal question, it's a question of how you deal with the risk of insider information."
"There's a moral and ethical level about this," he said.