Roth to step down from helm of central bank

Roth (left) prepares to vacate his chair Keystone

Departing Swiss National Bank (SNB) president Jean-Pierre Roth has been praised for restoring credibility to the institution during his eight-year tenure.

Roth announced on Friday that he would resign at the end of the year with no successor being named. He will depart in the midst of a global recession having taken measures to shore up the Swiss economy.

Roth took up his position in 2001 and his reign was sandwiched between two periods of economic turbulence punctuated by several years of prosperous growth. The reputation of the SNB was at a low point when he came to the helm after the turbulence of the 1990s.

Economic journalist Beat Kappeler believes Roth should take credit for instigating changes that would restore public faith.

“His achievement was containing the value of the Swiss franc in a low narrow range with low interest rates. This was a major achievement for the Swiss economy, tourism and exports,” Kappeler told swissinfo.

“The Bank was managed in a very propitious manner in the last years, in contrast to the 1990s. The policy back then of fighting inflation ruined the Swiss economy.”

Kappeler also praised Roth’s handling of the current financial crisis, which included a series of aggressive rate cuts, pumping liquidity into the market and bailing out Switzerland’s largest bank, UBS.

Future challenges

UBS chief economist Klaus Wellershoff also applauded Roth’s “wonderful track record” and the swift actions of the central bank at the end of last year.

“Looking back on the way the SNB handled the financial crisis, compares favourably to any other central bank in the world. It was a role model of effectiveness and good communication,” he told swissinfo.

“The SNB was also successful in steering away from creating issues that other central banks created with monetary policies that were too loose and that inflated real estate bubbles.”

While no successor has been officially named, most observers back a current vice-president, Philipp Hildebrand, to make the transition into the role. The new man faces the challenge of keeping Switzerland in step with future global market reforms and coping with mounting pressure against Swiss banking secrecy.

Wellershoff has no qualms with the timing of the 62-year-old Roth’s decision, which is rumoured to have been influenced by the stressful demands of the job in the last months. And he does not believe the central bank will significantly alter its policies in the near future.

“The SNB is not one man, it is a very solid institution, and Roth has built up a very good young team that he can rely upon. There is nothing to suggest that the effectiveness of the SNB to operate would be impaired,” he said.

swissinfo, Matthew Allen

Jean-Pierre Roth

Jean-Pierre Roth was born in 1946 and started working for the Swiss National Bank in 1979 after a period of teaching at Geneva University.

Between 1986 and 1996 Roth was in charge of foreign exchange and money market operations at the central bank.

In 1996 he was made a vice-president with responsibility for capital markets, bank notes, liaising with the government and controlling gold reserves.

Five years later he was promoted to the role of president, steering the central bank through the challenges of the 9/11 terrorist attacks in the United States in 2001, the introduction of the euro currency throughout Europe and the start of the current financial crisis.

Roth has also chaired the board of the Bank for International Settlements, based in Basel, since 2006. He will step down from this role in March.