SWITZERLAND’S CENTRAL bank was seeking a new leader yesterday to contain the strength of the country’s safe-haven franc after apparently forcing out chairman Philipp Hildebrand when emails failed to clear him of involvement in a currency trade by his wife.

The supervisory council of the Swiss National Bank made no statement after a six-hour meeting yesterday, keeping up suspense on who would now steer the franc through an unprecedented period of strength.

The issue is likely to dominate the Swiss government’s weekly meeting today, which will be followed by a press conference.

Mr Hildebrand’s wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs (€330,000) worth of dollars on August 15th, three weeks before her husband oversaw steps to stem demand for the franc by investors alarmed by the debt crisis in the neighbouring euro zone. She later sold the dollars at a higher rate.

Mr Hildebrand quit his post on Monday, saying he could not provide conclusive evidence that he had been unaware of the trade and that the intense public scrutiny over the affair was compromising his credibility. Only last week, he resisted calls to step down, saying he only learned of his wife’s trade a day after she made it.

Emails between Kashya, Mr Hildebrand and their Sarasin bank client advisor Felix Scheuber, released by the SNB on Monday, showed the central banker had been involved in discussions on a dollar trade but left it unclear whether he had approved it.

After examining the email exchange, the SNB’s advisory council indicated to Mr Hildebrand on Saturday that his position was no longer tenable, two Swiss newspapers reported.

In a note summarising an August 15th meeting, advisor Mr Scheuber said Mr Hildebrand “would leave it up to his wife Kashya to decide” whether to buy dollars. Mr Scheuber said he made the trade later that day after meeting Kashya at her art gallery office.

In an email from Mr Hildebrand to Mr Scheuber the following day, copied to his wife and the SNB general counsel, he wrote: “We never discussed any dollar purchases yesterday. Given Kashya’s email response and copy to me, I assume she gave you the order.

“In future, for compliance reasons, you are not authorised to execute any currency transactions unless the order comes from me or I confirm it,” he said, adding “Kashya: sorry about that but currencies really are a special case here.” – (Reuters)