The Swiss cabinet has confirmed the appointment of Thomas Jordan as head of the Swiss National Bank, three months after he took over in an acting capacity.
The move comes weeks after the Swiss franc temporarily fell below the central bank’s SFr1.20 exchange rate floor against the euro.
Seven months ago Jordan’s predecessor, Philipp Hildebrand, had staked the credibility of the SNB on checking the inexorable rise of the franc against the single currency.
The central bank has repeatedly vowed that it will do whatever it takes to defend the exchange rate floor and that it will not tolerate any efforts by the markets to destabilise its policy.
At a media conference in Bern on Wednesday, Jordan stated that he stood „fully behind“ the bank’s exchange rate floor policy.
The markets have been watching for any signs of weakness since Hildebrand was forced to step down as head of the SNB in January following a controversial currency trade by his wife last year.
The Swiss financial sector and exporters will be hoping that Jordan’s permanent appointment to the role will be viewed as a sign of renewed strength and stability at the central bank.
Solid reputation
The 49-year-old from Biel enjoys a solid reputation after joining the SNB in 1997 and climbing up through the ranks. He has a largely academic background; he received his doctorate from Bern University and did postgraduate work at Harvard.
Before his appointment, Jordan headed the financial markets unit and for the past two years oversaw the regulatory department, which is pushing for flagship banks UBS and Credit Suisse to solidify their balance sheets.
Jordan is also an honorary professor at Bern University, chairman of the SNB’s Study Center Gerzensee Foundation and chairman of the International Center for Monetary and Banking Studies (ICMB) in Geneva.
Standing almost two metres tall, Jordan is another giant at the central bank, surpassing his former colleague by a few centimetres.
According to a banking specialist cited in the German-language newspaper Der Bund, the new president embodies “typical Swiss characteristics” and is expected to be more restrained than Hildebrand.
Board appointments
Also on Wednesday, the government appointed Jean-Pierre Danthine as vice chairman of the governing board – effective immediately; he will be responsible for the areas of financial stability, cash, finance and risk.
In addition, the government named Fritz Zurbrügg, currently director of the Federal Finance Administration, a member of the bank’s governing board.
Starting in August, Zurbrügg will manage the department handling financial markets, banking operations and information technology. Until then, alternate board member Dewet Moser will act as interim head.
At the end of 2011, a rumour reached the media that SNB chairman Philipp Hildebrand had used his insider knowledge for personal gain.
First the media reported that the financial affairs of the Hildebrand family had been investigated by auditors and given the all clear.
Then details started emerging about an advantageous currency trade made by Hildebrand’s wife Kashya – a Swiss-American dual national. The implication was that she had inside knowledge about the bank’s plans to weaken the franc.
This was followed by revelations in some Sunday papers that the source of the information about the Hildebrands’ accounts was none other than Christoph Blocher, former justice minister, and deputy chairman of the right wing People’s Party. It turned out that he’d got the information from an employee of Sarasin Bank.
The next bombshell: the Weltwoche weekly magazine, which is close to the People’s Party, announced that it had “proof” that Philipp Hildebrand himself, not just his wife, had indulged in insider dealing.
Hildebrand spoke to the media on January 5, 2012, denying any wrong doing and completely rejecting calls for his resignation.
On January 9 Hildebrand faced the media again, this time to resign after realising he could not prove that he had been unaware of his wife’s transactions.