SVP strongman Blocher linked to bank scandal

A scandal that had threatened the standing of the Swiss central bank chief Philipp Hildebrand turned its focus Tuesday to a leading politician and critic of the banker.

SVP strongman Blocher linked to bank scandal
Paenultima (File)

Swiss media reported that Christoph Blocher, an outspoken figurehead of the far-right Swiss People’s Party, may have skirted Swiss law in helping spark an investigation into a money transaction by Hildebrand’s wife.

Kashya Hildebrand reportedly exchanged a large sum of Swiss francs weeks before the Swiss National Bank moved to devalue the currency by imposing a minimum value against the euro.

The SNB has since said an independent inquiry revealed no foul play.

Le Temps newspaper reported on Tuesday that Blocher delivered extracts from the couple’s banking documents to then president Micheline Calmy-Rey after requesting a meeting on December 15th.

Breach of client confidentiality is punishable by law but Basel authorities said on Tuesday no legal case had so far been launched.

Authorities will only act if a complaint is lodged, public ministry spokesman Markus Melzl told the ATS news agency.

Blocher, who has been critical of the SNB’s 1.20 francs to the euro floor, believing it should be higher for the sake of Swiss exports, has for the most part remained silent, merely telling media: “There’s a time to speak and a time to stay quiet. It is time to stay quiet.”

Kashya Hildebrand, who runs an art gallery in Zurich, reportedly bought $500,000 on August 15th, ahead of the SNB announcement on September 6th that it was to set a bottom limit for the franc against the euro.

The bank acted due to the currency’s value soaring amid the euro debt crisis, biting into Swiss exporters’ earnings.

After the measure was imposed, the dollar gained 10 percent against the franc.

Kashya Hildebrand said late on Tuesday that she had been interested in buying dollars due to the fact that they had “hit a very low level and become ridiculously cheap.”

In a written statement to SF Swiss television, her first public reaction to the currency revelations, the American of Pakistani extraction added that she had always followed the exchange market and had worked in the banking sector for 15 years between 1984 and 1999 before moving into art.

She said she was “astonished at the interest aroused by this purchase of currency” last August, saying the transaction had been notified to the Swiss National Bank and there had been no objection.

She justified the transfer by saying that 70 percent to 80 percent of the transactions carried out by her art gallery were done in dollars.

The SNB had responded to what it described as “unfounded rumours” in a statement on December 23rd, saying independent checks found no illegal transaction or exploitation of privileged bank information had occurred.

All transactions were examined in detail and “confirmed entirely with regulatory requirements,” the central bank said.

Blocher reportedly has strong contacts within the banking community, and in particular with Banque Sarasin in Basel where the transaction was said to have been made.

Late on Tuesday, the bank said one of its employees “illegally transmitted to a third party banking details” on Hildebrand.

The information concerned “transactions carried out by Mr. Philipp Hildebrand’s family,” the bank said in a statement, without providing details.

The employee said he had made the details of the documents known to “a lawyer close to the” Swiss People’s Party and that lawyer then arranged a meeting between the employee and Blocher, the bank said.

The Swiss government has said only that it was informed of the transaction and not by whom.

“Breaching client confidentiality is punishable by law. You can go to jail for it,” said a spokeswoman for the Basel-based Swiss Bankers Association.

“If that has been the case, then there ought to be an according procedure and sanctions.”

Under Swiss law, the head of the central bank is allowed to manage his or her own money dealings, unlike at the Federal Reserve and the European Central Bank where they are obliged to place their assets in a trust administered by a third party.

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Switzerland STILL has priciest Big Macs in the world

Switzerland has the most overvalued currency in the world according to The Economist’s Big Mac Index 2017, which the alpine country tops once again.

Switzerland STILL has priciest Big Macs in the world
Photo: McDonald's Switzerland
Invented in 1986 as a light-hearted guide to purchasing power parity, the Big Mac Index compares the cost of a McDonald’s Big Mac burger in countries across the world. 
Using the US dollar as the base rate, the 2017 Index showed a Big Mac in Switzerland to cost $6.35 compared with $5.06 in the US, meaning the Swiss franc is overvalued by 25.5 percent.
The exchange rate that would equalize the price of a burger in the two countries is 1.28 francs to the dollar, while the actual exchange rate is 1.02 francs.
The franc far surpassed the second highest country, Norway, where a Big Mac cost $5.67, overvalued by 12 percent.
Sweden, Venezuela and Brazil were the only other countries to have pricier burgers than the States. 
According to this ‘burgernomics’, the euro and the pound are undervalued by 19.7 percent and 26.3 percent respectively, said The Economist. 
However, the situation is different in an adjusted version of the index which takes into account labour costs and GDP. 
When adjusting for Switzerland’s average income, the franc is only overvalued by four percent, it found.
Brazil topped the adjusted index, which showed the Brazilian real to be 66 percent overvalued.
“This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower,” said the Index authors. 
“The relationship between prices and GDP per person may be a better guide to the current fair value of a currency.”  
Switzerland has topped the raw index for several years.