January 10th, 2012
08:24 AM GMT
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London (CNN) – When I first heard that the wife of Philipp Hildebrand, then president of the Swiss National Bank had bought foreign exchange, weeks before the bank changed policy, giving her a thumping big profit, it seemed an open and shut case.

Of course he had to go.

Whatever the truth, there is the perception of something smelly and central bank presidents have to be whiter than white. Beyond reproach. Above suspicion. Initially he tried to brazen it out. Finally he admitted that “it’s not possible for me to deliver a definite proof that my wife requested the currency transaction without my knowledge," so he resigned.

I still think he had to go.

But the more I have thought about this the more I ask, "why?" Surely it can’t just be because his wife did something which he says he knew nothing about. We are long past the Biblical (or Victorian) times of a husband being liable for their wife's actions. And once you accept that, then all he has been guilty of is having a stupid wife. who should have known better. As far as I know, that isn't an offense.

Hildebrand quits Swiss National Bank

I don't think for a moment he knew (otherwise he is criminal rather than joining his wife in stupidity) so there has to be more to justify his resignation. No. Philipp Hildebrand's offense was not reversing the transaction the moment he heard about it, the day after the dollars were bought, in mid-August. Instead those dollars weren't sold until October, making the Hildebrands a thumping profit. He wasn't just slow... he waited and made a profit.

So a picture has emerged of a central bank president who has previously traded currency when selling houses, held investments till profits were made, tried to brazen his way out of it and only when political support evaporated fell on his sword.

That is why he had to go.

It is a shame because, by all accounts, he was an excellent president of the SNB. Unfortunately in our world of heroes with clay feet and fallen superstars, they are in a league of their own.

Today's central bankers wield more power than most presidents and prime ministers. They are probably the only saviors of our economies for whom printing is the weapon of choice. They are the ones who have to dig us out of the mess. Bernanke, Trichet, Draghi, King – all on the front line in the battle for recovery and against inflation.

None of them has gone into the business to make an extra buck or two; they are all committed men of principle. In fact I know of one central banker who is so scrupulous that he will never let anyone pay for anything - even a light bite to eat. He never accepts an upgrade or any form of minor gift and takes the harshest and most unforgiving view of the rules on ethics. A legend in the industry for whom his word is his bond. I can’t see him, or his wife, accidentally buying hundreds of thousands of dollars and then doing nothing about it.

Philippe Hildebrand said mistakes were made around this transaction and that is right. But it is he, not his wife, who made them.

That is why he had to go.

soundoff (9 Responses)
  1. Hugh Jass©

    Quest contradicts himself in his writing. Is it he last paragraph or the 5th paragraph as to the reason Hildebrand had to go?

    January 10, 2012 at 12:40 pm |
  2. ignacio ayala

    if you truly believe what you wrote about hildebrand and the universality of bank presidents, then you probably also advocate in the realities of the tooth fairy, comic book heroes and santa claus and the rationality given by the bush administration for the war in iraq.

    January 10, 2012 at 12:42 pm |
  3. paul4innovating

    It is a shame, for you gained a good impression of Philipp Hildebrand and the way he was handling his part of the Currency crisis. He lost sight of his need to be totally without blemish and this one would (and will) stick with him sadly. He should have known better but so should his wife, now they both need to adjust to the cold hard realities of this.

    January 10, 2012 at 1:27 pm |
  4. Carl

    Is this guy talking about a banker or Jesus? Aw. Yeah, somebody picks up the tab when these people go out on their jollies after work... THE TAXPAYERS. They claim it back in business expenses. It is usually teambuilding they file it under.

    January 10, 2012 at 1:35 pm |
  5. phillip levy

    Dear Richard, Did you read the totally incriminating email (published in the Swiss newspaper Le Matin today Jan 10) that Hidebrand's asset manager sent him confirming both Hildebrand's knowledge of the transaction and his OK for it ? and this of course only a short time before making the Swiss franc plummet against the $US !!!

    January 10, 2012 at 1:41 pm |
  6. Lauro Silva Brazil

    sorry, but you're totally wrong about the central bankers. The only truth that you wrote about them is ..¨.Today's central bankers wield more power than most presidents and prime ministers¨. And what do you think about other bankers in general?. Also the ones to dig us out of the mess and fighting for recovery and against inflation?

    January 10, 2012 at 2:55 pm |
  7. none sense, have you been paid also by SVP

    you must have been paid by Mr. Blocher, as he has always done. Such a cheap behavior!

    January 12, 2012 at 9:28 pm |

    It's six of one half dozen of the other but what is good for the goose may not be good for the gander. Vanity and greed is the nature of the beast in us all, and we have to learn to harness it, and not get caught!

    January 18, 2012 at 11:27 pm |
  9. sameh

    very sad situation See the elephant is dying and die


    January 26, 2012 at 4:38 am |

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About Quest Means Business

Quest Means Business airs Monday to Friday, 1600 New York and 2100 London, and is hosted by Richard Quest.



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