Swiss Rate-Setter Search Is Chance to Catch Up on Diversity

The Swiss National Bank has just gained the chance to end the century-long male dominance of its governing board.

As the Zurich-based institution begins the search for a successor to Vice President Jean-Pierre Danthine, economists say the challenge will be finding a candidate who comes from the non German-speaking part of the country. The recruitment drive also is an opportunity to appoint the first woman to its top echelon since it was founded in 1907.

While there hasn’t been public criticism about a lack of female members on the SNB’s rate-setting board in Switzerland, where women didn’t get full federal voting rights until 1971, diversity has proved a contentious issue at other central banks. As the Bank of England and European Central Bank take steps to rectify gender imbalances and Janet Yellen this year became the first woman to lead the Federal Reserve, the SNB risks being cast as an outlier among major central banks.

“For a delicate decision, such as those on monetary policies, you need to think in all possible directions,” said Paola Subacchi, research director of international economics at Chatham House in London. A woman “can bring a different way of thinking than the group of men who have always been together -- they studied together, they worked together, and they think together.”

Danthine Retirement

Danthine will retire from the three-member board on June 30, giving the SNB almost a year to name a successor. With the two other members -- Fritz Zurbruegg and President Thomas Jordan -- hailing from Switzerland’s German-speaking region, the appointment will be dictated by a need to observe the tradition of a balanced representation of linguistic groups.

Alexander Koch, an economist at Raiffeisen Schweiz in Zurich, says it could be time for a female economist, “but the women you see most on TV and radio are German-speaking.”

One such high-profile figure is Beatrice Weder di Mauro, whom Swiss newspapers have touted every time a seat on the governing board has become available since 2009. Di Mauro, 49, is a professor at the University of Mainz in Germany and a former economic adviser to Chancellor Angela Merkel. A dual Swiss-Italian citizen from Basel, she is on the boards of Roche Holding Ltd. and UBS AG.

Danthine “was a team player and a important confidant” for Jordan, said Peter V. Kunz, professor of business and comparative law at the University of Bern, adding that finding a replacement won’t be easy. “We don’t have too many Swiss-French economists with the capabilities of a board member.”

SNB Choices

Potential French-speaking candidates are Cedric Tille, Philippe Bacchetta and Rajna Gibson Brandon, newspaper L’Hebdo reported on Sept. 8. Tille, a professor at Geneva’s Graduate Institute for International and Development Studies, has worked as an economist at the Federal Reserve Bank of New York and sits on the SNB’s Bank Council, its supervisory board.

Bacchetta, 54 and a Harvard University graduate, is chairman of the economics department at the University of Lausanne, while Gibson is a finance professor at the University of Geneva and sits on the board of Swiss Re. SNB governing board members must be Swiss citizens.

Also on the SNB Bank Council is Monika Buetler, 52, a professor at the University of St. Gallen who was named one of the country’s most influential economists by Neue Zuercher Zeitung newspaper this month. In addition, that list featured Locarno-born Andrea Baranzini, 49, a professor at the Geneva School of Business Administration.

The SNB Bank Council, which proposes a candidate who then is appointed by the government, could also opt for an internal candidate. SNB Financial Stability Director Bertrand Rime would fit the bill, Handelszeitung reported today.

Franc Policy

In the past, newcomers to the governing board often began with stewardship of the money markets department, which is currently in charge of defending the SNB’s cap of 1.20 per euro set three years ago. Danthine started in that manner and in 2012 moved to the regulatory division.

There have been deviations from that pattern, including Niklaus Blattner, who never oversaw the money markets division, instead joining as head of regulatory affairs in 2001 from the Swiss Bankers Association. Similarly, Jean Pierre Roth, later president, directly started overseeing the second department in 1996 after holding a variety of staff positions within the central bank.

Since September 2011, SNB monetary policy has focused on the cap, which has helped the Swiss economy to outperform that of the euro area. The governing board will hold its next policy meeting on Sept. 18 and is forecast to maintain the cap.

Jan-Egbert Sturm, head of the Zurich-based KOF Swiss Economic Institute, said a new board member “won’t abruptly change the central bank’s strategy.”

Diversity Challenge

While qualifications should be the primary focus, the candidate “should be able to communicate in the national languages and if possible also engage all levels of society,” he said. “In that respect a woman could be of benefit to the SNB.”

Gender imbalance has become an issue at central banks elsewhere in Europe. In the U.K., BOE Governor Mark Carney this year appointed two women to the Monetary Policy Committee after saying the all-male make-up of the panel was “striking.” At the European Central Bank, Yves Mersch’s appointment to the executive board in 2012 was delayed by months on European Parliament objections at the lack of senior women.

For the SNB, there will also be the language consideration. Sixty-five percent of the Swiss population considers German its main language, with 22 percent citing French and 8 percent Italian. The fact that many of the country’s universities are located in German-speaking cities, such as St. Gallen or Basel, adds to the diversity challenge.

‘Male Dominated’

There is an “unwritten law” that one board member is from the non German-speaking regions, SNB spokesman Walter Meier said by phone. He declined to say who may be in the running for the position or when a decision would be made.

In addition to Jordan and Zurbruegg, all three alternate board members are German-speaking men.

“I can think why Switzerland is keen to represent different linguistic groups,” Subacchi said. “The risk is in a traditionally male dominated profession like finance and economics, people naturally tend to look in their own network and they don’t go beyond that.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE