Swiss central bank Hildebrand goes
January 9, 2012
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As noted in a post last week, Philipp Hildebrand of the Swiss National Bank has been under strong pressure to quit since it was revealed that his wife had been engaged in foreign exchange speculation prior to the decision to fix the Euro – Swiss franc rate last fall. Today, he resigned, citing that he could not prove 100 % that the accusations of insider trading was wrong. He noted that it was important for him to have confidence as central bank president, and that confidence had been shaken. He also noted that he had fought hard to keep the job, but concluded that his position had become untenable.
The question is now what will happen with the EUR-CHF floor; SocGen are speculating that it may go too. The inflation rate is already negative (deflation) and manufacturing declining due in part to the strong franc. We will just have to wait and see.