STOCK MARKET WATCH - Thursday, 5 January 2012

[Demeter]

36. SNB publishes ethical code after currency trades

Political storm over the transactions conducted by Kashya Hildebrand, former foreign exchange trader married to central bank chairman

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http://link.ft.com/r/19JYUU/DWFGC2/CWSVD/ZGCM9C/IIU5FJ/UP/t?a1=2012&a2=1&a3=5

Hildebrand Stung by Wife’s Transactions

http://www.bloomberg.com/news/2012-01-04/hildebrand-battles-reputation-risk-as-wife-s-trades-hurt-guardian-status.html

Philipp Hildebrand is under pressure to explain how he can act as guardian of the Swiss franc and allow his wife to trade the currency at the same time.

Hildebrand, head of the Swiss National Bank (SNBN), will today break his silence on his wife’s purchase of dollars in August, the SNB said. That trade came three weeks before policy makers announced their biggest franc intervention since the 1970s. While an SNB probe cleared him of wrongdoing, some lawmakers and academics say the 105 year-old institution must do more to move away from a culture of bank secrecy.

“The SNB’s information policy was not very fortunate and they underestimated the momentum,” said Georg Lutz, a political scientist at the University of Lausanne, Switzerland. “If Hildebrand can’t break free from this media mess, he must consider his resignation. The loss of confidence is so dramatic that he might become a reputation risk for the central bank.”

Hildebrand’s central bank only agreed to publish rules on personal financial ethics yesterday following days of speculation and local media alleging the former hedge fund manager of using insider knowledge to his advantage. While all three currency transactions that were investigated more closely were cleared, a dollar purchase over $504,000 carried out by Kashya Hildebrand without her husband’s knowledge was considered “sensitive,” according to an investigation carried out by PricewaterhouseCoopers LLP last year.

The SNB president will hold a press conference at 4 p.m. in Zurich today....