Swiss Central Bank Head Roth to Retire at End of 2009

By Joshua Gallu

Feb. 27 (Bloomberg) -- Swiss National Bank President Jean- Pierre Roth, who steered the nation’s economy during the worst financial crisis since the Great Depression, will retire at the end of the year after three decades at the institution.

Roth, 62, who has chaired the central bank since January 2001, informed the Bank Council of his decision on Friday, the Zurich-based SNB said in a statement today. A successor has not yet been named, SNB spokesman Werner Abegg said in a telephone interview.

Roth’s retirement comes as the country’s financial sector struggles to regain its footing amid a global crisis and the economy faces its worst recession since 1982. Roth has been at the helm of the bank throughout the turmoil, during which time the SNB took unprecedented coordinated measures with central banks worldwide and rescued the country’s biggest bank, UBS AG.

The fallout from the credit crisis “will be felt for a long time,” Roth said in his resignation letter. Recovering from recession and the reform of the international financial system “will demand the full attention of the SNB in the coming years,” he said.

‘Risk Taking’

“It’s a pity that he’s leaving,” said Jan Poser, chief economist at Bank Sarasin in Zurich. “He’s always warned about too much risk taking and he’s been proven right. He’ll go down in history as a good president.”

Roth joined the central bank in 1979 and has been a member of its three-person Governing Board since 1996, guiding Switzerland’s economy through the introduction of the euro currency in its biggest trading partners and the implementation of a new Swiss monetary policy concept in 2000.

Since 2001, Roth has chaired the Governing Board, which is responsible for monetary policy. The other two board members are SNB Vice-President Philipp Hildebrand and Thomas Jordan. Poser said Hildebrand is the “obvious choice” to succeed Roth.

“Somebody who understands the banking system is certainly needed,” he said. “But it’s also important to balance the whole committee. They need somebody who knows how bailouts work and how they don’t work.”

The council will recommend a successor for Roth and the decision must be approved by the Swiss government. In 2001, the government chose Roth to head the SNB, going against the Bank Council’s recommendation of Bruno Gehrig.

“The national bank has been a key element these last few months and it wasn’t only luck that meant Switzerland entered the current economic crisis in the best possible condition,” Michel Derobert, Secretary General of the Swiss Private Bankers Association in Geneva, said in a telephone interview. Roth “certainly leaves the bank in a better state than he found it.”

To contact the reporter on this story: Joshua Gallu in Zurich jgallu@bloomberg.net