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Hildebrand says goodbye and SNB defends rates policy

The now-former Chairman of the Swiss National Bank says "resignation fills me with sadness", while the SNB confirmed that it will retain its current monetary policy with a minimum exchange rate of Sfr 1.20 against the Euro.

The demise of the Swiss National Bank's (SNB) now-former Chairman Philipp Hildebrand was sealed, as he read a statement at a press conference in Berne, in order to unveil more details on his resignation.

In a statement he read out in Berne, he emphasised, yet again, the lack of knowledge he had of his wife's (Kashya Hildebrand's) currency transactions

He said that the Chaiman's position should be absolutely credible, although he, again, maintained that he did not lie but he couldn't prove it any further.

Hildebrand also said that his decision to quit should help "maintain SNB credibility."

Here is the full speech.

Vice President Thomas Jordan will now be leading the central bank.

Meanwhile, the SNB released a  statement to reitterate its stance on its monetary policy:

Swiss National Bank Governing Board regrets resignation of Philipp Hildebrand

The Governing Board of the Swiss National Bank (SNB) has taken note of the resignation
of its Chairman. It regrets this decision and the circumstances that gave rise to it.

The SNB’s current monetary policy with a minimum exchange rate of CHF 1.20 against the
euro remains unchanged. This policy will be pursued further with the utmost determination

AND afterwards, a longer statement was released, about 5 minutes after the first:

Bank Council statement on resignation of Swiss National Bank Chairman, Philipp Hildebrand

Loss of an outstanding central banker

The Bank Council of the Swiss National Bank (SNB) has taken note of the decision by
Philipp Hildebrand, Chairman of the SNB Governing Board, to resign his post. With him,
Switzerland is losing an outstanding central banker with excellent international
connections, which have brought great benefit to our country.

Based on the events and findings of the past few days, Philipp Hildebrand has now
decided to resign his post. The Bank Council accepts this decision, which Philipp
Hildebrand has made in order to protect the institution.

The Bank Council would like to thank Philipp Hildebrand for his outstanding achievements
in the field of monetary policy, and for his enormous dedication in the service of both the
SNB and Switzerland. Philipp Hildebrand, together with his colleagues in the Governing
Board, successfully steered the SNB through a period of exceptional monetary policy
challenges. At all times, his endeavour and his goal was the optimal fulfilment of the
SNB’s mandate.

For the time being, the Vice Chairman, Thomas Jordan, will hold the position of Chairman
of the SNB Governing Board. The decision-making capacity of the Governing Board and its
capacity to act remain fully guaranteed. The free position in the Governing Board is to be
filled as soon as possible.

However, a timely update released by Societe Generale debates whether the SNB will "have to make a move" on the Euro / Swiss Franc:

The EUR/CHF has been weakening steadily over the past month and is now back at the low end of the 1.2125-1.2475 range, which is within the level since mid-September and the last limit before the 1.2000 floor implemented by the SNB on 6 September.

Upside pressure on the CHF has underpinned the stressful climate in the eurozone, despite the control system set up by the SNB and reduced global risk aversion mainly attributable to better US figures. The markets are waiting for the implementation of the measures agreed on at the end of last year (Merkel-Sarkozy meeting today); the situation in Greece is still a big concern (EUR15bn reimbursement on 20 March and discussions under way with the Troika); the budget outlook remains fragile overall (impact expected from the potential recession); and sovereign spreads remain stretched (notably for Italy at 520bp).

The initial reaction following Hildebrand resignation today was almost limited above 1.2125 even if the global tone for the CHF remains solid. A drop through the 1.2125 zone would open the door to the 1.2000 level. This threat would then force the SNB to react via market intervention. The Central Bank said today it will defend the 1.20 level with “utmost determination”.

At the end of the day, the likelihood of raising this floor is expected to grow as deflationary pressure increasingly threatens the Swiss economy. Global CPI has reached -0.7% yoy and core CPI is collapsing towards a historical level of -1.1% yoy (whereas the situation is stabilising in the eurozone). At the same time, manufacturing production is down for the first time since June 2009 (-4.3% yoy). In the highly uncertain economic environment with specific deflationary risks for Switzerland, and given the current evolution of spot rates, authorities are very likely to have to contend with raising the floor to over 1.20 in the short term.

For currency analysis in the aftermath of the Hildebrand saga - check out and for more details on the case, check out Euromoney's coverage below:

SNB's Hildebrand resigns

Swiss National Bank's Philipp Hildebrand has resigned after initially retaining his presidency at the central bank

Click here for the full story

Nightmare isn't over for Hildebrand

SNB's president was cleared of any wrongdoing and retained his job, but he is now answering to parliament over the controversial currency transaction

Click here for the full story

Confidence in SNB and Swiss banking wanes as Hildebrand stays on

The franc hits a three-week low after Swiss National Bank president Philipp Hildebrand announces he will stay on at the central bank, despite the FX transaction 'scandal' – and questions rise again over Swiss banking secrecy

Click here for the full story

Exploitation of FX markets?

Concerns continue to be raised over the lack of insider-trading law for the foreign-exchange industry, after the SNB's president Hildebrand was cleared of any wrongdoing when his family bought dollars just before the bank devalued the Swiss currency

Click here for the full story

Bank Sarasin employee allegedly passed on Hildebrand FX trade data to SVP party

The Swiss private bank says it has fired the employee who passed on data regarding the currency trades that placed the SNB president in the middle of an insider-trading case

Click here for the full story

Plot thickens on SNB insider-trading allegation

The Swiss National Bank's president Philipp Hildebrand has been cleared of insider trading, after allegations that his wife sold Swiss francs just a few days before the currency's devaluation. However, now Christoph Blocher has been accused by Swiss media of tipping off authorities

Click here for the full story

- Euromoney Skew Blog

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