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Rules tightened for SNB board’s own investments

The central bank board has been cleared of any wrong-doing by independent auditors Keystone

Members of the governing board of the Swiss National Bank (SNB) will face tough restrictions on personal financial transactions under new rules approved on Monday.

The regulations will be among the most restrictive of their kind at any central bank, the SNB council said. They come in the wake of a controversial foreign currency trade that resulted in the resignation of the former bank chairman Philipp Hildebrand.

The central bank had pledged to tighten the rules in January following the furore over a lucrative transaction by Hildebrand’s wife just weeks before the central bank imposed a cap of SFr1.20 on the euro in September.

Audits of the Hildebrand transactions have since found none of the old rules were broken.

The SNB said the new “far-reaching restrictions” would come into force on May 1.

The rules set limits on trading for the central bank’s three board members, their deputies, other management figures, and their families.

“Only savings accounts at the SNB, well-diversified collective investment schemes, payments into occupational pension funds, payments into individual pension fund savings schemes and investments in real estate in Switzerland or abroad will be permissible,” the bank said in a statement.

For other investment options management will have to hand control of their finances to independent asset managers. These managers in turn must be approved by the bank “to exclude even the appearance of a conflict of interest or misuse of information”.

SNB management are also banned from making certain investments which could “appear delicate in view of the central bank’s tasks”, it stated. 

Tighter monitoring

Foreign exchange transactions such as those at the heart of the Hildebrand affair will only be allowed if they are being managed by an independent asset manager, the SNB stipulated. However foreign exchange transactions will still be allowed in connection with the purchase, sale or holding of non-financial assets such as real estate.

Under a measure already in place since January, foreign exchange transactions of SFr20,000 or more will have to be approved by the bank’s compliance officer.

“Monitoring arrangements will also be significantly tightened,” the bank said, with members of SNB management required to disclose their assets on a quarterly basis.

The regulations were drawn up by a working group led by Zurich commercial lawyer Peter Forstmoser and based on a comparative law report by the Basel Institute on Governance. The report found the basic principles of the SNB’s current regulations were in line with those of other banks but that monitoring needed to be tightened.


An audit last week found there were no breaches of regulations in transaction by the SNB governing board from 2009-2011. The KPMG audit was commissioned by the central bank following Hildebrand’s resignation.

Two previous audits of Hildebrand’s transactions also found no rules had been broken, but he was still forced to quit after losing public confidence.

Thomas Jordan has been acting chairman since Hildebrand’s departure. A successor to Hildebrand is expected to be named by April 27.

Parliament is holding a special debate on the SNB this week.

At the end of 2011, a rumour reached the media that SNB chairman Philipp Hildebrand had used his inside knowledge for personal gain. 
Details started emerging about an advantageous currency trade made by Hildebrand’s wife Kashya – a Swiss-American dual national. The implication was that she had inside knowledge about the bank’s plans to weaken the franc. 
An IT worker at Bank Sarasin has admitted to taking screen shots of the Hildebrands’ accounts. He spoke to a lawyer who arranged a meeting with Christoph Blocher, deputy chairman of the right wing People’s Party. Blocher informed the government.
Hildebrand denied that legally, he had done anything wrong and rejected calls to resign. Four days later, Hildebrand again faced the media, this time to resign after realising he could not prove that he had been unaware of his wife’s transactions. 

He was subsequently cleared of breaching regulations in audits of the transactions.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR