Swiss parliamentarians called for tighter central bank rules on Monday as they met to grill central bank chief Philipp Hildebrand over a controversial currency trade made by his wife.
The hearing comes as the bank employee sacked for leaking the data was reported by Swiss media as having been committed to a psychiatric clinic after a suicide attempt.
The former Bank Sarasin
Hildebrand has been fighting allegations of wrongdoing since details of the trade, made just weeks before he capped the soaring franc, were leaked to a political rival.
Christoph Darbellay, the Christian Democrat chairman of parliament's economic committee, declined to comment on whether the body backed Hildebrand, but said it would be focusing on whether the Swiss National Bank should tighten its rules.
We are not a court, just a parliamentary commission. I think we're going to be talking about the future; is there a need to change the code? In principle they (the trades) were according to the rules, he told reporters as he arrived for the meeting.
Hildebrand's wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs (271,519 pounds) worth of dollars on August 15, three weeks before her husband oversaw steps to cap the rise of the franc.
The scandal has raised questions about transparency at the central bank, which initially failed to publish its internal ethics codes, saying auditor PricewaterhouseCoopers (PWC) had investigated the trade and found there had been no misuse of privileged information.
Hildebrand is due to appear before the committee in the afternoon alongside the head of the SNB's supervisory council, Hansueli Raggenbass, who is also under pressure over the affair, which has tarnished the central bank's reputation.
For me, the absolutely key question is whether the central bank is still credible and can keep the cap on the franc, said
Social Democrat parliamentarian Susanne Leutenegger Oberholzer.
The central bank code will have to be revised to forbid forex trades. I think that sharpening applies to family members as well, she said.
Hildebrand last week rejected calls to step down, saying he only learned of his wife's trade the following day, rejecting claims by the Swiss magazine Weltwoche that he had personally authorised the currency deal, which made a big profit.
Swiss media said he was expected to present emails to the parliamentary committee that appeared to confirm that it was Hildebrand's wife who initiated the transaction. The SNB declined to comment on the reports.
In future you are no longer authorised to carry out such currency trades, unless the request comes from me or I confirm it, Swiss papers quoted Hildebrand as saying in an email sent to his wife and her account manager on learning of the trade.
The SNB council said on Saturday it would overhaul its internal rules concerning own trading by board members and examine all transactions they made over the past three years.
SVP politician Caspar Baader said heads might still need to roll, including on the supervisory council: We need some clarity so that trust in our bank can be re-established.
Committee chairman Darbellay said the meeting would also be looking into the breach of Switzerland's cherished banking secrecy by the whistleblower and the SVP party, which is normally a strict defender of the privacy rules.
The breach of bank secrecy and using it for political goals, that was grave, he said.
LEAKER BACKS HILDEBRAND
Tarnutzer, who leaked details of the trade to the lawyer of one of Hildebrand's political adversaries from the right-wing Swiss People's Party (SVP), was quoted on Monday saying he had never wanted the private bank details made public, and that he believed Hildebrand should not quit.
I wanted to achieve clarification and not an issuing of data, he wrote in a letter sent to several Swiss dailies. I think it would be good if he (Hildebrand) stays in office.
He described the SVP's decision to hand over the information to the media as ruthless, saying that the breach of bank secrecy endangered his future: Here a potentially only small crime was fought with a bigger crime.
The psychiatric clinic where Tarnutzer was reportedly admitted declined to comment.
(Reporting by Caroline Copley; Editing by Tim Pearce and Andrew Callus)