Home » Swiss National Bank chairman Thomas Jordan to step down after 12 turbulent years

Swiss National Bank chairman Thomas Jordan to step down after 12 turbulent years

Swiss National Bank chairman Thomas Jordan to step down after 12 turbulent years

Swiss National Bank Chairman Thomas Jordan will step down in September, three years early, after more than a decade at the helm, during which the central bank has wrestled with crises including Credit Suisse’s collapse and a supercharged franc. The 61-year-old said on Friday he felt now was right time to step aside from the SNB, which he joined in 1997. As chairman since January 2012 he has steered the central bank through arguably the most tumultuous period in its 117-year history.

“Since I was elected to the board on May 1, 2007, there has been virtually no quiet period. One crisis has followed the next,” Jordan told a press conference.

Despite winning the battle against resurgent inflation, Jordan was criticised for the SNB’s slow response to the unfolding crisis at Credit Suisse, which culminated in the collapse of Switzerland’s second-biggest bank last year.
Jordan said the Credit Suisse episode had not influenced his decision to go “in any way”.

The SNB has also faced calls for an overhaul in its governance, with critics saying too much power lies with Jordan, while not enough women have been promoted. He declined to comment when asked whether a woman should replace him.

Potential successors could include Jordan’s deputy Martin Schlegel, the SNB’s current vice chairman, or Andrea Maechler, the SNB’s first female governing board member who left the bank last year to join the Bank for International Settlements.

Festive offer

Another name mentioned has been Renaud de Planta, senior partner at Swiss private bank Pictet. The successor must be Swiss.

Though standing down before his term was due to end in 2027, Jordan will be replaced in the conventional manner, with a nomination from the SNB’s supervising bank council being submitted for approval to the Swiss cabinet.
The procedure allows for an outsider to be nominated.

Jordan, who had a heart operation in 2021, told the press conference his health was not a factor in his decision to quit.

Asked what he would do next, Jordan said he had no plans and would be totally committed to the SNB until his departure at the end of September.

The Swiss franc eased against the euro after the announcement, with the single currency gaining 0.2% to reach its highest since November against the Swiss currency.

Jordan became a member of the central bank’s interest rate-setting governing board in May 2007 and became chairman when his predecessor Philipp Hildebrand was forced to step down after his wife was involved in euro and dollar transactions.

“He did a superb job and will be very difficult to replace,” said Karsten Junius, an economist at J.Safra Sarasin. “But maybe the end of his era is also a chance to broaden decision-making at the SNB.”

In 2020, Jordan was re-appointed by the Swiss government to remain as SNB chairman until 2027.

BOLD TECHNOCRAT

Seen by many as the epitome of a diligent technocrat, the Harvard-educated economics professor has not been afraid to take tough decisions.

In 2015 the SNB upended currency markets by suddenly scrapping the minimum exchange rate against the euro, a move which sent the safe-haven currency soaring.

In recent years, Jordan’s focus has been on tackling rising inflation, which although high in Swiss terms has been significantly lower than in other parts of the world.

Last year, he was involved in the SNB’s provision of emergency liquidity to facilitate Credit Suisse’s rescue takeover by its bigger rival UBS . The SNB’s handling of the early stages of the crisis has come under fire, with critics saying the central bank was too slow and too cautious to react despite being concerned about the bank since as early as February 2020. About six months before Credit Suisse was sold, Jordan wanted to inject 50 billion Swiss francs into the lender and nationalise it, Reuters reported in December, but was blocked by the government and financial regulator.

SNB Bank Council President Barbara Janom Steiner said she regretted Jordan’s decision to go.

“Thomas Jordan has been a defining influence on the SNB and its monetary policy for over a quarter of a century,” she said in a statement.

Economists said Jordan, the architect of the SNB’s ultra-loose monetary policy before changing tack by hiking rates in 2022, had been successful in his role.

Although instinctively cautious, Jordan did not shy away from unorthodox methods, such as introducing negative interest rates to block the Swiss franc’s strength when the safe haven currency was coming under massive appreciation pressure.

“The SNB is characterized by Thomas Jordan’s way of thinking so there is unlikely to be much change of approach, at least for the foreseeable future,” said UBS economist Alessandro Bee.

“Overall, he has done a very good job.”