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Swiss leader: Restoring confidence in the Swiss financial industry a key govt priority
GENEVA (AP) ' One of Switzerland's top priorities this year is to restore confidence in the country's financial industry, the Swiss leader declared Thursday after a series of setbacks that included the resignation of the central bank chief.
President Eveline Widmer-Schlumpf said the Cabinet was examining ways of tightening loopholes in its oversight of both the central bank and its directors' personal business transactions.
Swiss National Bank chairman Philipp Hildebrand stepped down Monday amid a public furor over his family's private currency deals, which he maintained were legal under the bank's internal rules against insider trading. Hildebrand was considered a key actor in Switzerland's efforts to resist being dragged into the European debt crisis.
Widmer-Schlumpf told reporters the government would await a report on the personal financial deals conducted by the remaining five members of the central bank's governing board before deciding who should replace Hildebrand. She declined to say whether external candidates would also be considered.
Mario Draghi, the president of the European Central Bank, indicated that Switzerland might not have lost its much-admired central bank chief if the Swiss National Bank's rules had been stricter.
"I have to say, we all regret the developments that led to Mr. Hildebrand's resignation because I think we will miss a very, very good central bank governor," he said at his monthly press conference in Frankfurt.
"I also have to say that the ethical code that we have in place at the ECB ' which is, by the way, public ' prevents any such happening," said Draghi.
With Hildebrand's resignation, Switzerland lost its coveted seat on the Financial Stability Board, an exclusive forum of central bankers and regulators. The 48-year-old Swiss was the FSB's vice chairman, giving Switzerland a significant voice when shaping plans to regulate the global financial industry.
At home, Hildebrand pushed through some of the strictest capital requirements for banks anywhere in the world. The rules were criticized as burdensome by Swiss banks, but backed by a government wary of the consequences for Switzerland if one of its two biggest banks ' UBS AG and Credit Suisse ' were to collapse.
UBS required a $60 billion government bailout in 2008 after it saw massive losses caused by the U.S. subprime mortgage crisis. A year later, the bank became embroiled in a major tax evasion case in the United States that required government intervention. And in September, UBS announced a $2.3 billion loss caused by a trader in London.
Widmer-Schlumpf, who is also the country's finance minister, said the Swiss government intends to continue its efforts to resolve long-standing disputes with other countries over tax evasion.
Switzerland has been gradually softening its banking secrecy rules in recent years amid pressure from cash-strapped governments angry that their taxpayers are hiding money in Swiss banks.
Negotiations with the United States were particularly difficult, she said. "They are not easy partners, we know that, but still they are constructive.
"I hope that we can resolve this issue in a way that respects the Swiss legal situation," said Widmer-Schlumpf.
Swiss media have reported that U.S. authorities are demanding the names of all Swiss bankers who had contact with American clients in recent years, with a deadline set for Jan. 23. Such a move could greatly increase the pressure on Swiss banks to reach a settlement with U.S. authorities.
Widmer-Schlumpf said the government is also examining the possibility of a tax deal with Italy that could mirror accords already reached with Britain and Germany. The European Union has opposed such bilateral agreements and demanded a universal agreement for all its 27 members.
Geir Moulson in Berlin contributed to this report.