Bloomberg News

Jordan Exits Hildebrand’s Shadow to Nurse Franc Credibility

April 19, 2012

Swiss Central Bank President Thomas Jordan insists he will maintain the currency policy instituted under his former boss with the same determinationeven as his appointment augurs a different style. Photographer: Gianluca Colla/Bloomberg

Swiss Central Bank President Thomas Jordan insists he will maintain the currency policy instituted under his former boss with the same determinationeven as his appointment augurs a different style. Photographer: Gianluca Colla/Bloomberg

Thomas Jordan’s elevation to lead the Swiss central bank has yet to benefit its franc policy.

The currency was little changed today after touching the lowest level in a week against the euro yesterday after Switzerland’s government promoted Jordan, 49, to replace former Swiss National Bank president Philipp Hildebrand. With the franc still close to breaching the 1.20 per euro ceiling for the third time since the cap was set in September, the new chief’s resolve is being tested.

Jordan insists he will maintain the currency policy instituted under his former boss with the same determination, even as his appointment augurs a different style. The incoming president’s pedigree as an academic economist who spent most of his career in his home country is more in tune with other SNB chiefs than Hildebrand, who previously worked for a hedge fund.

“Jordan is the meticulous academic and Hildebrand is more a man of the world,” said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. “Jordan might come across as a bit more wooden, but this might be exactly what the top job requires in these turbulent times. With the euro crisis worsening, risk aversion rising and the exchange rate approaching the limit, the SNB president’s job has become tougher.”

The new central bank president describes himself as having a typical Swiss approach to balancing views for decisions.

‘Show Resolve’

“The sense of stability and sustainability as well as the many checks and balances when making decisions are important assets of Swiss politics,” Jordan said in February, interviewed after delivering a speech at a conference in Geneva. “These typical traits also shaped my personality. On the other hand, rather than hesitating in times of crisis, you must show resolve and act quickly when making important decisions.”

Jordan told reporters yesterday that he stands for “the continuity of the SNB monetary policy” and said the currency limit instituted on Sept. 6 is “absolutely necessary” and backed by all officials on the central bank’s governing board.

The franc ended trading nearly unchanged versus the euro yesterday in Zurich, erasing earlier losses when it weakened as much as 0.2 percent. The currency was trading at 1.2018 per euro at 11:20 a.m. in Zurich today, little changed from yesterday’s close. It breached the ceiling on April 5 and April 9 because of what Jordan described last week as “market anomalies.”

‘More Reserved’

Jordan was left to steer the SNB as interim chairman through the past three months after Hildebrand quit on Jan. 9 over a currency purchase of $504,000 by his wife Kashya, who runs an art gallery in Zurich. A former employee of Moore Capital Management in New York and London, Hildebrand’s two-year term at the Zurich-based central bank was the shortest in the central bank’s history.

“With his international experience and an American gallery owner wife, Hildebrand didn’t fit the Swiss stereotype in the same way as Jordan,” said Martin Gueth, an economist at Landesbank Baden-Wuerttemberg in Stuttgart, Germany. “Jordan is more reserved in his demeanor than Hildebrand and comes across as less urbane.”

Jordan is a native of the Swiss town of Biel, where he excelled at water polo, playing with the local “Swim Boys” team, before joining the national league. As a teenager, he met his eventual wife Jacqueline, who now works as an English teacher and with whom he has two sons.

‘Thirst for Knowledge’

Max Stuecker, who taught Jordan in business and law at high school, said the SNB president is the best student he ever had.

“He always had a thirst for knowledge and wanted to get to the bottom of things,” Stuecker, who is now retired, said in an interview. “He asked the right questions and didn’t give up until he understood everything. And he grasped things very quickly.”

Unlike Hildebrand, whose career took him from hedge fund roles to Swiss private banks, Jordan has a largely academic background with three years spent at Harvard University in the 1990s. He studied economics and business studies in the Swiss capital, Bern, achieved a doctorate in 1993, and did post- doctoral research at the Department of Economics at Harvard.

Jordan, whose 1994 thesis focused on advantages and disadvantages of the European currency union, says he knew he wanted to become an economist at an early age.

“From the age on where you seriously ponder what to do in life, I always wanted to become an economist,” Jordan said in February. “That’s a genuine interest. In addition, my father was a jurist and my grandfathers were engineers. Being an economist meant doing something new, something different.”

SNB Career

Jordan joined the SNB in 1997, working his way up from head of the economic studies unit to deputy of the central bank’s governing board in 2004 and board member in 2007. He became vice chairman three years later.

While at the SNB, he helped design a government-led bailout of UBS AG in 2008, with the central bank setting up a fund for the lender’s toxic assets in a move that sparked tougher financial regulation and stricter capital rules. He was also part of the governing board’s decision to lower borrowing costs to zero in August and flood the system with cash.

Taking charge at the SNB after a disruption in its leadership, and under pressure from currency investors, Jordan’s job may not become any easier in coming months. Switzerland still faces the danger posed by the euro region’s fiscal crisis as Swiss companies threaten to move production sites abroad and labor unions call on the SNB to raise the currency ceiling.

While Jordan represents a very different personality to Hildebrand, “that does no harm to the SNB leadership,” said Pirmin Bischof, a lawmaker who has worked with both men in parliament commission meetings. “A calm person is a make-or- break in turbulent times.”

To contact the reporter on this story: Klaus Wille in Zurich at

To contact the editor responsible for this story: Craig Stirling at

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