Swiss leader: Must restore faith in Swiss banking

January 12, 2012 - 8:10 AM
Switzerland Central Bank

Swiss National Bank chairman Philipp Hildebrand attends a press conference in Bern, Switzerland, Monday Jan. 9, 2012. Swiss National Bank Chairman Philip Hildebrand resigned abruptly Monday, bowing to a public uproar over his private currency deals just as a Swiss parliamentary committee was preparing to grill him behind closed doors. Hildebrand's resignation took effect immediately, (AP Photo/Keystone/Peter Klaunzer)

GENEVA (AP) — One of Switzerland's top priorities this year is to restore confidence in the country's financial industry following a series of setbacks that included the resignation of its central bank chief, the Swiss leader said Thursday.

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 sucked into the European debt crisis.

Widmer-Schlumpf told reporters in Geneva that the government would await a report on personal deals conducted by the remaining five members of the central bank's enlarged governing board before deciding who should replace Hildebrand. She declined to say whether external candidates would be considered.

The Swiss government also intends to pursue deals with other countries aimed at resolving long-standing disputes over tax evasion, said Widmer-Schlumpf, who is also the country's finance minister.

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 members.