Business ethics according to the Swiss
Imagine if Mark Carney’s wife engaged in any large currency or bond market transaction at any time during which he has been the Governor of the Bank of Canada. The outcries for his immediate resignation would have been deafening, and the federal government most likely would have demanded his resignation. In this scenario, even if Carney’s wife was not privy to any Bank of Canada information, such trades would have failed the “smell test” and would have greatly diminished the public’s confidence in his credibility. Fortunately, none of this has happened, and is not likely to ever happen.
Imagine a similar scenario involving Ben Bernanke’s wife. The US Congress would have demanded his head on a platter quicker than you could say, “quantitative easing”. Not only would he have been fired, but Congress also would have launched an investigation into whether the Bernankes broke any laws.
Similarly, if the partner of the CEO of a major public US company buys or sells the company shares at any time during the four weeks prior to the company announcing its financial results, the SEC would start an investigation into insider trading.
In professional sports, players are not allowed to bet on games, including ones in which they do not participate. Pete Rose, one of the greatest baseball players of all times, is not likely to be inducted into the Baseball Hall of Fame because he did bet on baseball games.
Yet, in Switzerland, the wife of the Swiss National Bank (SNB) Chair, Philipp Hildebrand, engaged in a significant currency transaction three weeks before the SNB imposed a cap on the Swiss franc of 1.20 per Euro. In about an eight week period, she made a profit of about US$83,000 by initially buying US dollars for Swiss francs and then selling US dollars for Swiss francs. Keep in mind that average GDP per capita in Canada is about $48,000.
There are press reports in Switzerland that Hildebrand himself actually ordered the transactions. Regardless, the transactions definitely do not pass the “smell test”.
Nevertheless, the Swiss Government supports Philipp Hildebrand. Mr Hildebrand told reporters at the SNB’s headquarters in Zurich (a lovely city by the way) on Thursday: “So long as I have the confidence of the government and the bank council, stepping down is not an issue for me.”
Obviously, business ethics is an oxymoron in Switzerland. But this should come as no surprise for a country whose motto most likely has been: “Don’t ask, don’t tell!” Don’t tell Swiss bankers how you made your money, or more likely how you stole it, and the bankers will never ask you how you got the money. All the Swiss care about is getting your money and charging you fees for the privilege of their keeping quiet.
I wonder how many of the recently deposed leaders around the world had accounts with private Swiss banks? I bet all of them did. Similarly, I wonder how many of the tyrants that run the 20 most corrupt countries in the world have accounts with Swiss banks? Here again, I bet that all of them do.
Furthermore, I wonder how many accounts initially set up by the Nazi leaders during the war are still active in Switzerland? I suspect there are many.
The arrogance of the Swiss rarely has an equal. I do not like arrogance in general, but I can grudgingly accept it when there is substance behind it. This is not the case with the Swiss. My advice for the Swiss elite is simple: “If you are a moron, don’t advertise.”
The views expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.