Swiss central bank head Philipp Hildebrand came under pressure on Wednesday following revelations of sensitively timed currency trades by his wife and the sacking of a whistleblower who passed details to the lawyer of a political adversary.
The employee of Bank Sarasin was fired for leaking data showing that Hildebrand's wife Kashya, a former trader who owns a Zurich art gallery, bought dollars three weeks before the central bank capped the Swiss franc. The case goes to the heart of Switzerland's bank secrecy.
Kashya told Swiss television she felt good about the deal last August that local tabloid Blick reported had yielded a 60,000 Swiss franc ($64,400) profit on a 500,000 franc trade.
What motivated me to buy dollars was the fact that it was at a record low and was almost ridiculously cheap, she was quoted as saying on Swiss television. As I have worked in the financial and banking industry for over 15 year and always observe the markets, I felt at ease with this transaction.
The Swiss National Bank has already investigated Kashya's trade and said it did not infringe internal rules. On Wednesday it went a step further, releasing an internal document and a report by auditor PWC that it said showed inaccuracies in media accounts.
But in a country that has been plagued by scandals linked to a banking industry that has helped the world's wealthy hide from the taxman, politicians called on the central bank to divulge its internal codes of conduct.
As rumors started swirling about potential legal suits, politicians called on Philipp Hildebrand and the bank to clarify what had happened. One central bank official called Kashya's trade a lot for a weekend shopping trip to New York.
It may well be completely above board but nevertheless it leaves a bitter taste in the mouth, the official said.
The bank condemns the misuse of confidential bank data for political purposes in the strongest possible terms, it said.
The latest twist comes as U.S. prosecutors accused three Swiss bankers of conspiring with wealthy U.S. taxpayers to hide more than $1.2 billion in assets from tax authorities.
Sources briefed on the matter told Reuters in the United States that the three worked for Wegelin & Co, one of Switzerland's oldest private banks.
Blocher had already called for Hildebrand to resign after running up record losses for the central bank by trying to stem the rise of the Swiss franc as people sought sanctuary in the currency from the euro zone sovereign debt crisis.
But to date Blocher, who transformed the right-wing Swiss People's Party into the country's largest political force and who is one of Hildebrand's most virulent critics, has declined to comment.
There is a time to talk and a time to be quiet. In this affair, it is time for me to be silent, he has told Swiss television.
Kashya, who was born in northern Pakistan but was brought up in America and is an American citizen, cut her teeth in trading while working for U.S. hedge fund Moore Capital, according to Swiss newspaper reports.
Police raided the London offices of Moore Capital, headed by billionaire Louis Bacon, in 2010 and arrested an equity trader as part of Britain's biggest swoop on an insider trading ring.
The Swiss financial markets watchdog FINMA was not immediately available for comment. The Zurich police declined to comment.
($1 = 0.9323 Swiss francs)
(Additional reporting by Caroline Copley, Catherine Bosley, Andrew Thompson and Katie Reid, writing by Kirstin Ridley)