GENEVA: Swiss President Eveline Widmer-Schlumpf has defended the head of the central bank, Philipp Hildebrand, accused of insider trading, and said he should not resign.
"We would lose a (central bank) president who has undisputedly done excellent work, has a good network, and could be very useful to Switzerland," said Widmer-Schlumpf, who is also finance minister, on Swiss television late Friday.
What the Swiss National Bank chief had done was "excusable if you realise that you shouldn't do that and that the rules should be changed as a result," she said.
Hildebrand spoke publicly for the first time on Thursday to address revelations that began appearing late last month in the Swiss media about his personal fortune and currency transactions carried out by himself and his wife.
He said he would not quit as long as the federal government and the Bank Council, which oversees the central bank, retained confidence in him.
Press reports claimed that Hildebrand's wife Kashya profited after buying $504,000 (396,000 euros) last August just weeks before an intervention by the SNB to halt the rise of the franc -- a move that saw the dollar rise significantly against the Swiss currency.
The scandal took a political turn with revelations that the government last month received banking documents concerning Hildebrand's personal trades from Christoph Blocher, chief of the conservative Swiss People's Party (UDC), the largest in the Federal Assembly.
The Swiss weekly Weltwoche, close to the UDC, said the controversial currency trades were made by Hildebrand and not by his wife without his knowledge, as the central bank had indicated.
Hildebrand rejects the allegation, saying a report by PricewaterhouseCoopers auditors cleared the couple of any wrongdoing, even if they deemed the purchase "sensitive".
A criminal investigation was opened into a Bank Sarasin employee who admitted taking part in leaking Hildebrand's banking documents to the media.
Hildebrand does not face trial but he will be questioned again on Monday, along with Widmer-Schlumpf, by the economy committee of the Council of States, the Federal Assembly's upper house.
The SNB said Saturday it would hire an outside firm to audit all banking transactions carried out by managers between 2009 and 2011.
"It became evident that, given the events of the past few days and developments in financial markets, as well as with a view to improving transparency, taking measures is in order," the SNB said in a statement.
The audit would likely be carried out by KPMG or Ernst & Young.
Until regulations had been revised, senior staff members and those with access to privileged information must get prior approval for foreign exchange transactions exceeding 20,000 Swiss francs (16,400 euros.)
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