(REUTERS) -- The supervisory council of the Swiss National Bank forced Philipp Hildebrand to step down as chairman after emails about a currency trade by his wife failed to clear him of involvement in the deal, newspapers reported on Tuesday.

Hildebrand's wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs ($418,000) worth of dollars on August 15, three weeks before her husband oversaw steps to cap the rise of the safe-haven franc. She later sold the dollars at a higher rate.

Hildebrand quit his post on Monday, saying he could not provide final evidence that he had been unaware of the trade and that the intense public scrutiny over the affair was compromising his credibility.

Only last week, he resisted calls to step down, saying he only learned of his wife's trade a day after she made it.

Emails between Kashya, Hildebrand and their Sarasin bank client advisor Felix Scheuber released by the SNB on Monday showed the central banker had been involved in discussions on a dollar trade but left it unclear whether he had approved it.

After examining the email exchange, the SNB's advisory council indicated to Hildebrand on Saturday that his position was no longer tenable, two Swiss newspapers reported. The SNB declined to comment on the reports.

One had to say in the interest of the national bank that given the documents that had just surfaced there was nothing more that could avert a resignation, the TagesAnzeiger daily quoted one unnamed member of the council as saying.

One member of the bank council who declined to be named did not directly confirm the report but noted that Hildebrand had failed to thank the bank council at his farewell news conference.


To read emails on SNB web site, click: http://www.snb.ch/en/mmr/reference/pre_20120109_3/source/pre_20120109_3.en.pdf

To read emails on SNB web site, click: http://www.snb.ch/en/mmr/reference/pre_20120109_3/source/pre_20120109_3.en.pdf



Jean-Pierre Roth, the former SNB chairman who handed over to Hildebrand two years ago, said his successor should have reversed the trade as soon as he became aware of it.

He knew that several days later he would change monetary policy which would affect the franc exchange rate, Roth told daily Le Temps. He made a serious error of judgment unfortunately and today he must pay the consequences.

In a very difficult economic and monetary environment, the credibility of the SNB has been hurt, the bank is weakened.

The SNB's supervisory council said on Monday Vice Chairman Thomas Jordan, who joined the SNB in 1997, would take over as chairman for the time being, with the government expected to confirm him soon in the position permanently.

Jordan, who enjoys a solid reputation, heads the SNB's regulatory department, which is pushing for flagship banks UBS and Credit Suisse to firm up their balance sheets.

Jordan said on Monday he was prepared to take the top job on a permanent basis if the government asked him to do so and stressed his determination to continue to enforce the 1.20 per euro cap on the franc that the SNB imposed on September 6.

Hansueli Raggenbass, the head of the SNB council who is also under fire for his handling of the scandal, said the body would discuss on Tuesday how to proceed on finding a new member for the three-person policy-setting board.

The SNB is likely to look for another German speaker to replace Hildebrand on the governing board to complement French-speaking Jean-Pierre Danthine and German-speaking Jordan. Swiss public institutions always seek to balance representatives from the different language groups in this multilingual country.

The three most likely internal candidates are the current deputy directors: Thomas Moser, Thomas Wiedmer or Dewet Moser.

The SNB council said on Saturday it would overhaul its internal rules concerning board members' own trading and examine all transactions they made over the past three years.

The Swiss franc, which Hildebrand had fought to stop soaring on safe-haven buying driven by the euro zone debt crisis, rose slightly on the news of his departure. But the market is not seen testing the franc cap because of the upheaval.

The credibility of a central bank does not depend on one person, said Daniel Hartmann of Bantleon Bankan, Besides, with Thomas Jordan the SNB has an experienced person on the board. The exchange rate will be influenced more by other factors, such as the euro zone crisis.

(Writing by Emma Thomasson; Editing by Mike Peacock)