Swiss Urged To Use Succession To Boost Women, Environment At Central Bank

The departure of Thomas Jordan as the chairman of the Swiss National Bank has triggered a lively debate about using the succession to push reform at the central bank, including boosting the number of women and greening its investment portfolio

Zurich, (APP - UrduPoint / Pakistan Point News - 14th Mar, 2024) The departure of Thomas Jordan as the chairman of the Swiss National Bank has triggered a lively debate about using the succession to push reform at the central bank, including boosting the number of women and greening its investment portfolio.

After leading the SNB for a dozen years -- during which he confronted numerous challenges including the Covid-19 pandemic and the rescue of Credit Suisse -- Jordan unexpectedly announced at the beginning of the month he will step down in September.

The SNB's Governing Board has yet to tip its hand about its choice of successor, but Jordan's deputy since August 2022, Martin Schlegel, is seen as most likely to step into his shoes.

"Often in the past the Vice Chairman has taken over when the incumbent Chairman has left their post, suggesting that Martin Schlegel could be the next SNB leader," Adrian Prettejohn at Capital Economics said in a recent market commentary.

Schlegel, 47, has spent his professional career at the Swiss central bank since obtaining a doctorate at the University of Basel.

Since joining in 2003, he has worked in the analysis of financial and monetary markets, as well as currency and gold operations, and at the BNS branch in Singapore. He has participated on International Monetary Fund projects.

But besides his professional CV, "very little is known" about the "rather reserved and unassuming" Schlegel except that he's a runner, remarked RTS, the national radio and television broadcaster.

- Opportunity for reform -

The chairman of the central bank is appointed by Switzerland's government, the Federal Council, following a recommendation by the SNB's Governing Board. Traditionally, the vice chairman is promoted to the top job.

There have been calls to reconsider this practice.

"In our view, the Vice-Chairman should not automatically be appointed Chairman," said a report by the SNB Observatory, a group of outside economists from academia and business that promotes public debate about monetary policy.

It noted with Schlegel having been appointed two years ago, and Antoine Martin this year, the three-member "Governing Board is inexperienced by historical standards."

Socialist lawmaker Samuel Bendahan, who is also an economics professor at the University of Lausanne, said "the Federal Council isn't obliged to bow to that tradition" which he considers to be in a similar vein to the "logic of hereditary monarchies".

"They can take someone from outside" he told AFP.

Bendahan would like to see the government choose someone who will break with what he sees as SNB's overly free-market policies and said it is an opportunity to appoint a woman to the Governing Board.

All three members of the board are currently men, while one of four "alternate members" is a woman.

Bendahan said "we can't be a modern country without correcting" the extreme under-representation of women in the SNB.

According to the SNB's data, women account for nearly one third of its staff, but only 17.1 percent of managerial positions.

The SNB has repeatedly come in for criticism for its lack of parity, including last year when Andrea Maechler stepped down from the Governing Board, the first and only woman to have served on the bank's top body.

The SNB Observatory also called for the central bank's Governing Board to be enlarged to promote more debate from wider viewpoints.

Sergio Rossi, a macroeconomics and monetary policy professor at the University of Fribourg, called for the SNB to "green its portfolio" of assets, thus acting as an example to banks and insurance companies.