Citing anti-money laundering rules and other regulations, traditional banks in Switzerland have often refused to operate accounts for crypto companies. But Heinz Tännler, finance director of Zug canton, said he believes regulators and politicians may remove some obstacles for crypto firms and allow them to work with banks in the same way as companies in other industries, the Financial Times reported.
“We hope to clarify relationships by the end of the year at the latest,” Tännler told the FT. “Time is pressing — other jurisdictions such as Malta and Singapore are very active and making a lot of effort to attract these companies. The lack of access to bank services is a significant competitive disadvantage.”
Yet the country’s central bank, federal government and financial supervisor “are willing to help,” according to Tännler. And while some institutions had to be pushed to resolve to the problem, “that now seems to be going well,” Tännler told the paper.
The news comes after Schweizerische Nationalbank Board Director Thomas Moser said that he doesn’t think it’s the right time to talk about issuing a national cryptocurrency for the country. During the “Future of Token Economy” panel at the Crypto Valley Conference in Zug, Switzerland, earlier this year, Moser said blockchain is similar to the “useless innovation” of compact discs, according to Cryptovest.
Switzerland isn’t the only country putting plans for a national crypto on hold. Earlier this month, it was reported that Estonia has shelved plans to develop its own national cryptocurrency after the idea prompted criticism by banking authorities and Mario Draghi, the Italian economist and president of the European Central Bank.
Estonia, which is among the most tech-friendly countries in Eastern Europe, had been a leader in potentially issuing a national cryptocurrency, but the plan was criticized by Draghi earlier in the year when he said the euro can be the only currency in the country.
Supporters of the initiative argue that the potential change would make the system less dangerous to credit risks. They use the 2008 global financial crash as an example of why the banking system needs to reduce irresponsible spending. Opponents, such as UBS Chief Executive Officer Sergio Ermotti argue that approving the initiative would be “suicidal.”
“For us, it’s actually a really intellectual challenging exercise. What you just mentioned… would effectively prevent the commercial banking sector from running money multipliers, from lending out to the economy and creating deposits,” Evelyn Herrmann, European economist at Bank of America Merrill Lynch, told CNBC’s “Squawk Box Friday.”
She added that a sovereign money system would have “a very different notion of what we label as money.”
Around 85 percent of the money currently in circulation in Switzerland is thought to be electronic money created by domestic banks.
Sunday’s vote has sparked debate over how the financial system should work, but the Swiss referendum is unlikely to bring practical changes at this point. Polls indicate that only a third of Swiss voters are in favor of the initiative.
And according to Herrmann, even if the Swiss people would approve the changes, these would not come into effect straightaway. “Even if the vote were to go through… the SNB (Swiss National Bank) policy would not change overnight. The government would have two years to actually implement this reform, that would give room to possibly modify it a little bit, to work around it.”
(Bloomberg) — Year after year, ski resorts in the Alps bemoaned the worst snowfall in recent memory. Mountains were left bare, skiers disappointed and travelers deterred. This season some of the biggest ski stations are struggling to deal with too much of it.
In Zermatt, Switzerland, thousands of skiers were stranded in the village for three days last week after train access and roads were shut because too much snow created avalanche risks. It was the second time this season alone that access to Zermatt, perched at the base of Switzerland’s most famous mountain, the Matterhorn, was cut off.
“We got the snow we needed for the past four years in about one week,” said Christian Eckert, the managing director of the Omnia, a five-star hotel in Zermatt. The risk of being trapped this year is reminiscent of the notoriously avalanche-ridden winter of 1999. On Tuesday, the snow cover was 1.35 meters (53 inches).
Eckert and the Omnia provided free rooms for the hotel’s 53 guests—a mix of Swiss, British and Canadian tourists—that would have otherwise gone for 500 Swiss francs ($535) to 2,500 francs a night. After three days, Eckert arranged for a helicopter evacuation at 70 francs per person for a 90-second flight.
For the first time in almost two decades, many of the Alps’ snowmaking machines are idle, from Austria to France and south into Italy. The main culprit has been mild and humid air masses from the Atlantic and Mediterranean that brought heavy storms to regions such as Valais and Davos, according to weather service MeteoSwiss.
Whether it’s climate change or a one-time weather system, hoteliers and skiers are elated. In Switzerland, about 164,000 people are employed in tourism, which generates about 16 billion francs for the economy, or about 2.5 percent of economic output, approaching that of the nation’s famed commodity-trading industry.
Most hotels say rooms are filling up after years of disappointment. However, a series of piste closures, road shutdowns and delays have prevented a ski nirvana.
“In the short term, it was costly for us because there was nearly no skiing for some days, and guests weren’t that happy,” said Simona Altwegg, a spokeswoman for Zermatt Tourism. Bookings have recovered “we think, because of the snow, and those who like powder.”
In Chamonix, France, the host of the 1924 Winter Olympic Games, locals are enjoying the benefits of the heaviest early season snowfall in more than a decade.
While a lack of snow during last season’s Christmas and New Year’s period forced hotels to create indoor games to keep children occupied, this season they’ve been dealing with a prolonged snow dump that’s strained local services tasked with keeping the roads clear.
“I don’t remember having so much snow so early on,” said Claire Burnet, a spokeswoman for the Chamonix tourism board who’s lived in the valley, about an hour’s drive from Geneva, for 31 years. There’s already about 2 meters of snow piled near her home, she said, which usually gets about 3 meters in an entire year. “There’s been so much,” she said.
While ski trails were open at lower-altitude Les Houches every day in January, at least some of Chamonix’s higher stations—including the Grands Montets, prized by off-piste powder hounds—were forced to shut for five days during the month because of high winds or too much snowfall.
Temperatures, meanwhile, have been warmer than normal. Geneva, the Swiss city that’s the jumping-off point for many Alpine resorts, had its warmest January ever and the fifth-most precipitation since 1864, according to MeteoSwiss. A heatwave could cause floods.
In Sion, in the Canton of Valais and near Swiss resorts Verbier and Crans Montana, precipitation in January was about 2 meters, more than four times normal. Higher up, at an altitude of 2,500 meters on the Col du Grand-Saint-Bernard, more than 850 millimeters (33 inches) of precipitation fell in January, more than three times the normal level, according to MeteoSwiss.
In the Austrian Alps, about 30 roads and passes were closed last week after about a meter of fresh snow fell, partially cutting off the ski resorts of St. Anton and Ischgl.
Hotels in Ischgl and in the Arlberg region said guests had already arrived and left for the weekly turnover before the road closures because of extreme avalanche risk.
“We had enough wine in the house, we had enough food, so it wasn’t too bad,” said Nicole Becker of the luxury Hospiz hotel in St Christoph on the Arlberg pass.
Many parts of the western Austrian Alps already have more snowfall than they normally have in the entire winter season, said Alexander Orlik, a meteorologist at Austria’s Central Institution for Meteorology and Geodynamics.
“The timing was more than ideal this year,” said Andreas Steibl, the head of the tourism association in Ischgl in Austria’s Paznaun valley, where bookings are above last year’s. “The snow started in early November, three weeks before the season started, which made the start of the season perfect.”
And unlike the early snow in Austria last season, which melted before Christmas, colder temperatures there this year have helped the snow stick.
“We’d get along with what we have until the end of April, even if there’s nothing new,” the Hospiz hotel’s Becker said.
…Credit Suisse is not exactly known as an irreproachable banking institution…
…Actually quite the opposite…
Francisco (Abouaf) de Curiel Marques Pereira
(Bloomberg) — The boss of the former Credit Suisse banker
on trial for taking money from the accounts of six Eastern
European clients told a Geneva court that he had no idea how
Patrice Lescaudron wasn’t caught by the bank before the crime
spiraled out of control.
Basile Samarine, head of Credit Suisse’s Russia-CIS wealth
management department between 2006 and 2010, said Wednesday that
Lescaudron was seen as a “star,” once he took over the accounts
belonging to Russian financier and former senator Vitaly Malkin
and Bidzina Ivanishvili, the former prime minister of Georgia.
Lescaudron has admitted to falsifying trades to cover his
growing clients’ losses as a “gnawing fear’ drove his deception
deeper. Lawyers for his victims have consistently tried to steer
the trial, now in its fourth day, onto Credit Suisse’s role in
the affair, while the bank has insisted it knew nothing of
Lescaudron, who had no banking experience prior to joining
Credit Suisse in 2004, was seen as the only banker on Credit
Suisse’s Russia desk with the knowledge to take over important
accounts, Samarine said. Lescaudron was viewed with “honesty and
integrity” by Credit Suisse brass in Zurich.
He was in regular contact with both the bank’s investment
banking division and its “Ultra High Net Worth” unit, reserved
for the bank’s richest clients, Samarine said.
Lescaudron has admitted that in early 2009 he began
fraudulently tinkering with Ivanishvili’s money. The billionaire
Georgian reckoned the stock market had hit bottom and wanted to
move $600 million of bond holdings into shares through Credit
Suisse’s Singapore office.
A month later, he found out that his biggest client had
missed out on a major rally because his colleagues in Asia never
made the shift, so he decided to make up for the lost money by
forging orders to buy stocks he thought were undervalued. Some
trades were so successful, he said, that he was able to move
some of the proceeds to other clients’ accounts to make up for
Maurice Harari, Ivanishvili’s lawyer, asked Samarine if he
could recall a conversation with Lescaudron about those early
losses. Samarine said he could not, stressing that he was in
charge of logistics for the Russia desk, not compliance.
Samarine was then asked how these early sub-accounts could
go undetected. “I don’t know,” he said. There had been an
internal audit of Lescaudron’s accounts before Samarine left the
bank in late 2010, but that they revealed nothing, he said.
“Why did the control mechanisms not work?” asked Christian
Luescher, the lawyer for Malkin, a business partner of
“I can’t explain it,” came the answer from Samarine.
…Credit Suisse is not exactly known as an irreproachable banking institution…
…Actually quite the opposite…
(BBG) A former Credit Suisse Group AG banker, accused of taking millions from rich clients’ accounts to cover trading losses, told the court on the first day of his trial that stress from the financial crisis and his growing losses took a great toll on his health.
Patrice Lescaudron said that he’d worked for two accounting firms and in the luxury goods industry before he went to work for Switzerland’s second-largest bank in Geneva. His experience at Credit Suissestarted well, but became stressful starting in 2007 as he took on more assets before the financial crisis struck a year later.
The 54-year-old Lescaudron, who faces a sentence of as much as 10 years in prison, is on trial on charges that he defrauded a half dozen Eastern European clients — including former Georgian Prime Minister Bidzina Ivanishvili — out of millions as he battled losses on trades. Lescaudron has admitted to running a frantic shell game with client cash to hide the losses.
“I was treated for hypertension but also depression…and lost some 28 kilos (62 pounds),” Lescaudron, dressed in blue jeans and a gray open-neck shirt, said in a quiet voice Monday. After two years in a Geneva jail in pretrial detention, he was led in by police and remained flanked in court by two policemen. “I’ve thought a lot about what has happened since 2007.”
Cut and Paste
Lescaudron said that starting in 2008, he began to fake orders, cutting out Ivanishvili’s signature and pasting it onto fake orders so that he could then wire money into the accounts of smaller clients with growing losses. He admitted to doing the same that same year with another customer, Vitaly Malkin, a Russian businessman and former senator.
Lescaudron, according to the indictment, had already had significant losses for Malkin in 2008 investing in Austrian real estate company Meinl European Land Ltd. without Malkin’s permission. Meinl’s stock lost more than half its value in 2007 after it was investigated for allegedly misleading investors.
Lescaudron testified after Judge Alexandra Banna rejected bids from the former banker’s victims to delay the trial to allow time for Credit Suisse to turn over more information on the disputed trades and to make changes to the indictment.
The trial of the Frenchman, who has not been released on bail because he’s deemed a flight risk to France, is scheduled to last up to two weeks.
Banna oversaw the trial of a Geneva fund manager in 2015 who was found not guilty of mismanaging a fund that streamed clients’ money to convicted fraudster Bernard Madoff. This trial is infinitely more complex with seven plaintiffs, including five Russians, Ivanishvili and Credit Suisse, which has also won itself injured party status in the case.
Vincent Jeanneret, the bank’s lawyer, earlier on Monday drew the court’s attention to the allegation in the indictment that Ivanishvili made $1.5 million in payments to Lescaudron in 2008 and 2009, which have not been explained.
Lescaudron had not yet been asked about those payments by Banna as of late Monday afternoon. Ivanishvili is not attending the trial because of ongoing medical treatment, according to his lawyer, Maurice Harari.
(BBG) Boris Collardi stunned investors by stepping down as chief executive officer of wealth manager Julius Baer Group Ltd to join a rival bastion of Swiss private banking.
Having held the top job at Zurich-based Julius Baer from the age of 34 and emerging as the industry’s consummate salesman, Collardi is effectively taking a demotion to become Pictet & Cie.’s co-head of global wealth management. Baer only learned of his decision to leave at the weekend, according to its chairman, who said the move was for personal reasons, without elaborating. Key shareholder Harris Associates was among those expressing disappointment at the departure, which sent Julius Baer shares down the most in 17 months.
Collardi is swapping the limelight and pressure of leading a listed company for a lower-key but potentially more lucrative position at Switzerland’s third-largest wealth manager. Collardi is the first outsider in almost two decades to join Geneva-based Pictet & Cie as a partner, with the wealth manager having counted only 42 people in that position in its more than 200-year history. Pictet partners receive a share of annual profit, which was 422 million francs ($430 million) in 2016, while Collardi earned 6.5 million francs last year.
“We assume that the main reason for Mr. Collardi’s decision was not to be publicly exposed anymore in the way like he was at Julius Baer,” Andreas Brun, an analyst at Mirabaud Securities in Zurich, said on Monday by telephone. “He is probably one of the best representatives of a company we can think of in terms of selling a bank’s investment case.”
Julius Baer fell 6.1 percent at 5:02 p.m. in Zurich, the biggest decline since June 2016. The drop pared gains this year to 25 percent, still the fourth-best performance in the 20-member Swiss Market Index.
Collardi personified the rise of Julius Baer as a young and energetic CEO, doubling assets since taking over almost a decade ago and spearheading a drive into Asia, inspired by his experience in Singapore with Credit Suisse. It’s a contrast with Pictet, run by a committee of six to nine partners that jointly own and manage the business, according to a report by the Witten Institute for Family Business. The majority of partners come from a small circle of Geneva families, though partners can’t pass on their stakes to their children.
In a sign that some private banks are broadening their horizons to deal with the challenges facing the industry, Lombard Odier earlier this year hired Annika Falkengren, chief executive officer of SEB AB for 11 years, as managing partner to bolster the bank’s international expertise.
“Geneva private banks need growth and Collardi is an executive who has proven that he can deliver on that front,” said Christian Zogg, a fund manager at Liechtensteinische Landesbank AG. He holds Julius Baer shares.
Renaud de Planta was the last outside executive at Pictet, joining from UBS in 1998. Since him, there have been four internal promotions: Remy Best, Marc Pictet, Bertrand Demole and Laurent Ramsey.
In addition to being a coup for Pictet, the appointment may also be a boost for Geneva’s private banking sector, which has suffered outflows related to the end of bank secrecy and the decline of the once thriving fund of hedge funds business. Pictet oversaw about 492 billion Swiss francs at the end of September. That compares with 393 billion francs at Julius Baer. There won’t be a shift of Pictet’s strategy but the bank is keen to benefit from Collardi’s network, especially in Asia Pacific, a personal with knowledge of the matter said.
Collardi said in September that he expects the region to account for about a third of its business in the next five years.
“Sad, disappointed to see him go,” said David Herro, Harris Associates’ investment chief for international equities. “But certainly I believe the organization is strong enough to handle it.” Harris is the third-largest shareholder in Julius Baer and the largest in Credit Suisse Group AG.
Pictet is owned by its partners, who changed its corporate legal structure at the start of 2014 so they no longer have unlimited liability for losses.
The partners live in the region and meet several times a week, according to a spokesman for Pictet. Each new partner receives a form of loan from the others in order to acquire his initial stake, which is paid back over several years with profits made from their share in the partnership, according to the Witten Institute report. The average tenure of each partner is more than two decades.
“Partners have to be nominated by existing partners,” the report said. “And as they know they will be working together for the next 20 years or so, this decision is probably given more consideration than many marriages.”
In some ways it’s a return to his roots for Collardi, who grew up in Nyon on the shores of lake Geneva and started his career with Credit Suisse in Switzerland’s French-speaking financial hub.
(Reuters) Former senior HSBC currency trader Stuart Scott will be extradited to the United States to face charges that he defrauded Cairn Energy Plc (CNE.L) in a $3.5 billion(£2.66 billion) currency trade in 2011, a London court ruled on Thursday.
On Monday Scott’s former boss Mark Johnson was convicted of fraud in the United States in the same case.
“We believe the U.S. government’s case to be flawed and materially inaccurate and we also believe that this has led the court to fall into error,” a lawyer representing Scott said.
“This case is unique in that it is a UK-centric case and represents a far too aggressive an assertion of the U.S. jurisdiction to criminalise conduct,” she said in a statement, adding that Scott would contest the extradition ruling.
The pair were charged by the U.S. Department of Justice last year of ‘front running’ the Cairn trade, meaning they were alleged to have profited at their client’s expense by trading before they executed Cairn’s currency order.
Johnson was head of HSBC’s global foreign exchange cash trading desk at the time, while Scott was HSBC’s head of cash trading for Europe, the Middle East and Africa.
Johnson, a 51-year-old British citizen, was the first banker to be tried in the United States as a result of worldwide investigations into the multi-trillion-dollar per day currency market.
The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders.
A David vs. Goliath battle is brewing in the world’s biggest hub for offshore wealth.
Big banks are pushing back against Swiss plans to relax rules that are making it hard for small financial firms to compete against the likes of UBS Group AG and Credit Suisse Group AG. While Switzerland is home to about 300 banks and securities dealers, most — about 260 — have no more than a few billion francs in assets. Together they represent just 10 percent of total assets.
“There should be differentiation in regulation between different types of banks,” said Yves Mirabaud, president of the Geneva Financial Center industry association and senior managing partner of family-owned Mirabaud & Cie. “This is contested by the large banks.”
“The big banks prefer to have everyone treated the same way as they are, for obvious reasons,” he said in an interview at his Geneva office.
Regulations in Switzerland have become more stringent and complex since UBS’s state bailout in 2008, drawing complaints from small banks that they are paying the price for a crisis they didn’t cause. Now the country’s financial regulator says some rules introduced to control big banks may have given them an competitive edge because the regulations are more expensive for smaller rivals to apply.
Major banks could be hard-wired to influence regulation to keep barriers to entry “nice and high,” Finma President Mark Branson said last week in a speech outlining plans to make it easier for small banks to report liquidity and capital adequacy. Other proposals include allowing them to perform audits every three years instead of annually.
Small banks are an advantage for the industry because they readily offer sophisticated services, have close contacts with customers and know the ins and outs of their localities. They are just right size for “road-testing and driving innovation,” said Branson, a former banker at UBS.
Yet smallness has drawbacks. Rural lenders and boutique wealth managers are generally less profitable than big banks because they don’t benefit from cost-savings based on scale. UBS Chief Executive Officer Sergio Ermotti and Credit Suisse Chairman Urs Rohner have said Swiss banks need to consolidate to boost profitability.
“It is important to Finma that small banks have a fair chance to grow, progress and continue to operate profitably in their various value propositions,” Branson said. “That is why the unnecessary hurdles and costs faced by small banks should be identified and wherever possible eliminated.”
A fixture in Swiss banking for almost 200 years, Mirabaud manages about 31 billion francs ($36 billion) in client assets. That’s 60 times smaller than UBS, the world’s largest wealth manager. About 10 percent of its workforce is employed in making sure the bank follows laws, regulations and business standards, areas that barely existed 20 years ago.
“Our concern is the cost of doing business is more and more important,” Mirabaud said. “It is proportionally more expensive for us to calculate ratios, do reporting, have yearly audits.”
On a more positive note, Mirabaud said the bank’s brokerage may break even this year after an overhaul prompted by several years of losses. The business has gone through “tremendous changes” to make it profitable again, he said.
Spokespeople for UBS and Credit Suisse declined to comment on whether they oppose the changes. Mirabaud declined to specify which large banks are against Finma’s proposals. Swiss banks manage the largest share of the world’s privately held offshore wealth, a position under pressure from Singapore, Hong Kong and the Channel Islands.
Finma plans to set up an expert panel and to test proposals on some banks next year. The new rules would concern only the two smallest categories. The regulator classes banks in five categories based on total assets, assets under management, deposits and required capital.
Credit Suisse and UBS are in the first group, meaning they have the potential to destabilize the financial system. Mirabaud is a category four bank with a broad international clientele, mainly in South America, Eastern Europe and the Gulf countries. It employs around 700 people, half of them in Switzerland.
“It seems like Finma is taking this issue into their hands. Whether in a good way or not – it’s too soon to say,” Mirabaud said.
Swiss prosecutors are trying to figure out why someone apparently attempted to flush tens of thousands of euros down the toilet at a Geneva branch of UBS Group AG.
The first 500-euro ($597) bills were discovered several months ago in a bathroom close to a bank vault containing hundreds of safe deposit boxes, according to a report in Tribune de Geneve confirmed by the city prosecutor’s office. A few days later, more banknotes turned up in toilets at three nearby restaurants, requiring thousands of francs in plumbing repairs to unclog the pipes.
In all, police have extracted tens of thousands of euros in soiled bills, many of which appear to have been cut with scissors.
While destroying banknotes isn’t a crime in Switzerland, “there must be something behind this story,” said Henri Della Casa, a spokesman for the Geneva Prosecutor’s Office. “That’s why we started an investigation.”
He declined to discuss the case further. UBS also declined to comment on the incident at its branch on the Rue de la Corraterie in downtown Geneva.
(BBG) The latest probe into Credit Suisse Group AG is a blow, not just for the firm but also for the Swiss attorney general, who didn’t know some of the bank’s offices were going to be raided. This week, Swiss authorities are back in damage-control mode, after almost a decade of financial scandals spanning Bradley Birkenfeld’s whistle-blowing to thePanama Papers.
Mark Branson, chief executive officer of Swiss financial watchdog Finma, will face questions about what he knew about March 30 raids in in London, Paris and Amsterdam when the regulator holds its annual press conference at 9:30 a.m. on Tuesday. On Wednesday, Swiss Attorney-General Michael Lauber will be at the center of another media scrum in the capital, Bern.
Dutch authorities, who arrested two people last week, are investigating dozens more on suspicion of concealing millions of euros in Swiss bank accounts, while criminal investigations are also under way in France, Germany, the U.K. and Australia. That raises the question whether the raids are a legacy of the untaxed assets accumulated before Swiss banks settled tax-evasion disputes with the U.S. Department of Justice, or a sign of more intractable problems.
“It’s mainly bad for the reputation of the bank and reviving old cliches,” said Daniel Regli, an analyst at Mainfirst in Zurich. “It’s about past business practices, which Credit Suisse already should have abandoned a while ago.”
Australia has expanded an investigation into Credit Suisse, obtaining the details of more than 1,000 accounts linked to local clients, the Australian Financial Review reported today, citing the country’s tax office. Credit Suisse says it hasn’t been contacted by Australian authorities.
The Zurich-based bank this week took out double-page advertisements in newspapers, including The Wall Street Journal, the Financial Times and Le Figaro, stating that “Credit Suisse applies a strict zero-tolerance policy on tax evasion.” In the ads, Credit Suisse said that in 2011 it had asked all clients to prove their tax-compliance.
Iqbal Khan, head of international wealth management at Credit Suisse, has said that as far as he knew, the probes target individuals outside the bank and that no assets held at the bank were confiscated. Khan said last week he was surprised by the timing of the raids, coming the day before the introduction of new automatic exchange of information rules. Those regulations are intended to improve data sharing as authorities fight tax evasion.
Still, perhaps the Swiss shouldn’t have been too surprised. Tax authorities in the Netherlands asked their Swiss counterparts in July 2015 for details of Dutch clients at banks including Credit Suisse. The Dutch request pertained to clients who held non-compliant accounts at Credit Suisse between Feb. 1, 2013 and Dec. 31, 2014, according to a report in Le Matin Dimanche. The bank complied with the request, the newspaper said.
The Swiss attorney-general’s office said in a statement on March 31 it was “astonished” it hadn’t been informed in advance of the raids. The office, which is also working with Singaporean and U.S. prosecutors on probing how more than $3.5 billion was diverted from Malaysia’s 1MDB, said “rules of international cooperation were not followed” in the case.
The Dutch investigation is probably “the last chapter” of a “hangover period” that’s the legacy of banking secrecy, said Bill Sharp, a U.S. tax lawyer who specializes in Swiss-American cases.
Credit Suisse was fined $2.6 billion in 2014 after admitting it helped Americans cheat on their tax obligations, and also paid 260 million euros ($277 million) to settle tax probes in Italy and Germany. Another 80 Swiss banks have entered into non-prosecution agreements with the DoJ in return for disclosing details on how their clients evaded taxes, while UBS Group AG paid $780 million in 2009 to settle its own dispute over tax evasion with the U.S. government.
Credit Suisse has reported more than 40 billion francs ($39.9 billion) in outflows since 2011 from clients that moved to become tax compliant, Khan said. While the bank has admitted past wrongdoing in relation to so-called legacy assets, he reiterated its current zero-tolerance of tax cheats.
The Dutch investigation shows cooperation on international law enforcement is working, with the net closing on tax dodgers, said George Turner, a researcher at theTax Justice Network in London. Last week’s raids were coordinated by Eurojust, the agency that manages judicial cooperation across the 28-member European Union.
“Credit Suisse has been moving away from the old Swiss private bank secrecy model moving onshore in other local markets,” said Barrington Pitt Miller of Janus Capital Management LLC. “So in a sense what the probe shows is their strategy is consistent with the legacy Swiss model not being sustainable in the current environment.”
(BBG) Credit Suisse Group AG and its home country of Switzerland were surprised by a tax evasion and money laundering investigation that spans five countries from Australia to the U.K. and potentially involves thousands of account holders.
Two people were arrested by Dutch authorities, who also seized a gold bar, paintings and jewelry and are still probing dozens more suspected of concealing millions of euros in Swiss accounts, the Netherlands’ Fiscal Information and Investigation Service said Friday. Criminal investigations are also underway in France, Germany, the U.K. and Australia, and the roles of bank employees are part of the inquiries.
“The sheer volume of data and its international scope makes this an exceptional case,” said Thierry Boitelle, a lawyer with Bonnard Lawson in Geneva.
The probes could jeopardize Chief Executive Officer Tidjane Thiam’s efforts to focus Credit Suisse on wealth management and to boost capital depleted by fines for past misbehavior. The bank said its offices in London, Paris and Amsterdam were “contacted” on Thursday by authorities in connection with client tax matters, and that it’s cooperating with the authorities.
The timing of the investigation came as a surprise, said Iqbal Khan, the head of the bank’s international wealth management unit. He added that the probe concerns individuals outside the bank and said that no assets held at Credit Suisse were confiscated. “We’ve taken a proactive stance” on tax compliance in Europe, Khan said.
The raids were done without informing authorities in Switzerland, that country’s attorney general’s office said in a statement. The Swiss aren’t conducting a criminal probe into the matter, a spokeswoman said.
“If the Swiss authorities wish to receive information on the investigation, we, the other countries involved and Eurojust, are always willing to discuss with them,” said Marieke van der Molen, spokeswoman for the Dutch public prosecutor’s office. She added that they received no information about Swiss residents.
Credit Suisse fell 1.2 percent to 14.90 francs in Swiss trading, the second-worst performance in the Bloomberg Europe Banks Index.
In a statement Friday from Zurich, Credit Suisse said it has “implemented Dutch and French voluntary tax disclosure programs and exited non-compliant clients,” and has applied a withholding tax agreement with the U.K. since 2013.
The tip that triggered the investigation came from one or more informers to a team in the FIOD, the criminal investigation service of the Dutch Tax and Customs Administration, said spokeswoman Wietske Visser. The five countries coordinated their actions through the European Union’s Judicial Cooperation Unit, which said in a statement that the investigation started in 2016 and that further actions are likely in the next few weeks.
Thiam, 54, had been looking to shake off the negative publicity from a series of tax evasion scandals that plagued his predecessor. Credit Suisse was fined $2.6 billion in 2014 after admitting it helped Americans cheat on their tax obligations, and conducting what then-U.S. Attorney-General Eric Holder called a “shamefully inadequate internal inquiry” into the wrongdoing.
In Europe, Credit Suisse agreed in October to pay about 109.5 million euros ($117 million) to Italian authorities to resolve a probe into the bank’s use of insurance policies allegedly designed to help clients evade taxes, five years after paying 150 million euros to settle a tax evasion dispute with the German government.
Thiam, who took over the top job less than two years ago, has pledged to focus on wealth management, and has had to deal with fresh scandals and fines unrelated to tax evasion. Credit Suisse has had to defend its role in allegations of criminal fraud and negligence to the detriment of Russian and Turkish clients by former employees of its wealth management unit. The bank also agreed in December to pay a $2.48 billion civil penalty to resolve a U.S. investigation into its mortgage-backed business.
“The impact for the bank is very hard to assess right now, but generally I’d say it’s a setback for every private bank when you are being investigated,” said Chirantan Barua, an analyst at Sanford C. Bernstein & Co. in London. “The pressure on offshore private banking will be relentless over coming years.”
Credit Suisse isn’t alone. Eighty Swiss banks have entered into non-prosecution agreements with the Department of Justice in return for disclosing details on how tax evasion by their banking clients worked. UBS Group AG, Switzerland’s largest bank, turned over client names and paid $780 million in 2009 to settle its own dispute over tax evasion with the U.S. government.
The fresh investigations come as Credit Suisse begins implementing a new global standard for the automated exchange of information for its European locations. About 100 countries, or jurisdictions, including Switzerland, have agreed to collect data from banks to share annually with other tax authorities, making it harder for tax dodgers and money launderers to hide money with private banks.
The Netherlands has shared information about 55,000 people with accounts at a Swiss bank with authorities outside the country, Van der Molen at the Dutch public prosecutor’s office said. Information about a further 3,800 Dutch people was also received, and in the Netherlands there are “dozens of suspects,” she said.
“The investigation has brought to light several thousand bank accounts opened in Switzerland that weren’t declared by their owners to French tax services,” The French financial prosecutor said in a statement.
The U.K. tax authority is investigating “senior employees” at a global financial institution, it said in a statement. “The international reach of this investigation sends a clear message that there is no hiding place for those seeking to evade tax,” the U.K. authority said in its statement.
Australia’s Serious Financial Crime Taskforce said it had identified 346 of its citizens “with links to Swiss banking relationship managers alleged to have actively promoted and facilitated tax evasion schemes.”
“Taskforce agencies are working through their intelligence to determine the taxpayers in this group who have done the right thing, and those who have been concealing the true nature of their tax affairs,” Australia’s Minister for Revenue and Financial Services Kelly O’Dwyer said in a statement. “The message from these investigations makes it clear that governments worldwide are shining a light on offshore tax evasion, and it’s only a matter of time before you’re in the spotlight.”
The UK could be a “serious competitor” to Switzerland as a low-tax business location in a post-Brexit world, the Swiss finance minister has said.
The UK could “develop very positively” outside the EU, Ueli Maurer told the Financial Times in an interview. Switzerland would also benefit from Brexit by gaining an ally outside the EU but might find the UK challenging its attractive corporate tax regime, he said.
Mr Maurer also predicted the EU would have to bow to voter concerns in many countries and allow more curbs on free movement of people. While not an EU member, Switzerland abides by bloc rules that enshrine free movement.
“The free movement of people is an issue that the EU has to solve. They have to give countries more freedom, I believe, otherwise it could break up over this [issue] . . . The pressure is growing and so the EU will have to make certain concessions in favour of the member states,” he said.
Mr Maurer’s upbeat comments on Brexit contrasted with warnings by other European leaders about its potential costs and could provide comfort for Brexit supporters who regard Switzerland as a possible model for the UK outside the EU. Britain is set formally to trigger its two-year EU exit negotiations on Wednesday.
“The UK has lots of advantages and if they are used cleverly to decouple from the EU, as well as the new freedom in a good bilateral relationship, then the UK could develop very positively — I’m convinced of that,” Mr Maurer said.
Like the UK, Switzerland is strong in financial services and higher education, noted Mr Maurer, a prominent politician with the ultra-conservative Swiss People’s party (SVP). “That is perhaps the chance — that we have a partner in the same position, which on important issues is close to us.”
Since the second world war, Switzerland has attracted international businesses with special tax perks. Under pressure from other countries to end unfair practices, it agreed to move to a system under which all companies paid the same tax rates. But Swiss voters rejected the necessary legislation last month in a referendum.
Mr Maurer said Bern would rejig the tax proposals to prevent “blacklisting” by other countries. “We have to be a favourable tax location — otherwise we will be too expensive,” he said. But the Swiss finance minister noted the UK had cut corporation tax. “That worries us a little,” Mr Maurer said. “The UK could suddenly become a serious competitor.”
The UK’s main 20 per cent corporate rate compares with an average of just under 18 per cent across the 26 Swiss cantons. Philip Hammond, UK finance minister, has suggested that the country could move further towards a low-tax economic model if it did not win a favourable EU exit deal.
Mr Maurer said the UK’s room for manoeuvre would be reduced because its public debt levels were much higher than Switzerland’s. “Perhaps you [the British] cannot copy us completely but the conditions for keeping jobs in the UK and strengthening the financial centre are good — and tax is an important instrument.”
Switzerland has a web of bilateral deals governing its relations with the EU, including allowing the free movement of people. But maintaining the ties has been more difficult since 2014, when the Swiss voted for restrictions on immigration from neighbouring EU countries.
Mr Maurer said he believed Brexit would lead Brussels to become more flexible on many of its rules. “The EU cannot lose further countries, otherwise it would no longer be stable. To avoid that, there will have to be some relaxation and, mid- to long-term, Switzerland will benefit from that.”
Switzerland was only marginally affected by Europe’s migration crisis, which saw millions of people fleeing wars in places such as Syria to start new lives in Germany and other countries. But foreigners account for a quarter of Switzerland’s 8.2m population, and 300,000 commute daily across the borders with France, Germany, Italy and Austria.
Mr Maurer suggested the EU had to acknowledge concerns in member states that are stoking the rise of populist politicians such as Marine Le Pen, a leading candidate for the French presidency, or Geert Wilders in the Netherlands.
“They don’t have unlimited room for manoeuvre — that’s clear. But when they don’t do anything, then perhaps Le Pen wins in two years, or four years. The AfD [in Germany] will be stronger, Wilders in the Netherlands, Beppe Grillo in Italy . . . The opposition will simply be greater,” he said.
Worries about European political instability, exacerbated by France’s presidential election campaign, have pushed the already-strong Swiss franc even higher. In turn, that is hitting Swiss exporters. “The more instability in Europe, the stronger the franc — because the franc is a haven currency,” Mr Maurer said.
With the Swiss central bank intervening heavily in foreign exchange markets to weaken the franc, the US has put the country on its “watch list” of possible currency manipulators. Mr Maurer hopes to convince the US otherwise. “When I understand it correctly, the US feels that some countries create unfair advantages over the US. Switzerland is not doing that,” he said.
Copyright The Financial Times Limited 2017
(c) 2017 The Financial Times Ltd. All rights reserved. Please do not cut and paste FT articles and redistribute by email or post to the web.
WASHINGTON (Dow Jones) — Several North Korean state banks have been recently banned by the world’s most important financial messaging service, amid growing calls in Washington and Europe for the complete isolation of Pyongyang from the international financial system.
The Society for Worldwide Interbank Financial Telecommunication, known as Swift, banned the North Korean banks in recent weeks, the Belgian company told The Wall Street Journal. The move came as United Nations investigators uncovered evidence that the banks had continued to use Swift’s global services despite being on U.N. sanctions lists. The U.N. published the report earlier this week.
The Swift network is the lifeblood for most international commerce and banking transactions. Without it, countries under sanctions, as Iran recently was, have been forced into conducting barter trade or smuggling operations.
Although North Korea’s access to global financial markets was already constricted by longstanding international sanctions, the country continued to access it either overtly or through front companies in China, Southeast Asia and Africa, the U.N. said in its report.
Members of Congress have suggested Swift could be in violation of U.S. law by conducting business with North Korean firms, according to congressional staffers. Last year, the Treasury Department designated North Korea’s entire financial system as a primary money-laundering concern.
According to the U.N. report, seven blacklisted North Korean banks continued to use the Swift network in recent years. Four of the banks voluntarily exited, but three continued to be active on Swift throughout 2016, the report said. It wasn’t clear how the three banks kept using Swift despite being blacklisted.
The U.N. named the banks as: Bank of East Land, Korea Daesong Bank and Korea Kwangson Banking Corp. Efforts to reach the banks in Pyongyang were unsuccessful.
The Treasury Department has sanctioned all three banks for their alleged role in illicit businesses.
Swift, in a statement provided to the Journal on Monday, said it stopped providing services to all U.N.-sanctioned North Korean banks after receiving instructions from the Belgian government earlier this year.
The company didn’t state how many nonsanctioned North Korean firms still have access to its system.
(Reuters) Credit Suisse is to cut up to 6,500 jobs this year after reporting a 2.44 billion Swiss franc ($2.43 billion) net loss for 2016, and said it was examining alternatives to a planned stock market listing of its Swiss business.
Chief Executive Tidjane Thiam, who took over at Switzerland’s second biggest bank just over 18 months ago, is shifting the group more toward wealth management and putting less emphasis on investment banking.
As part of his turnaround plans, the bank is looking to cut billions of dollars in costs and cut a net 7,250 jobs in 2016 with more to follow this year.
“We’re setting a target now of between 5,500 and 6,500 for 2017,” Chief Financial Officer David Mathers said in a call with analysts on Tuesday after the bank published earnings.
The bank did not specify where the extra cuts would come but said this would include contractors, consultants and staff.
Credit Suisse said it was still preparing sell 20-30 percent of its Swiss business in an initial public offering but left the door open to alternative options to strengthen its balance sheet. It said a flotation depended on market conditions and board approval.
“So we will continue as planned our preparations for an IPO in the second half of ’17,” Thiam told analysts on the call.
“That said, we will also continue to analyze the evolution of our regulatory environment which is key in this and, as we always do, continuously examine a broad range of options to determine if there are ways to reach a more attractive risk/reward outcome for our shareholders.”
For the fourth quarter, Credit Suisse reported a 2.35 billion franc net loss, largely on the back of a roughly $2 billion charge to settle U.S. claims the bank misled investors in the sale of residential mortgage-backed securities..
The average estimate in Reuters poll of analysts was for a quarterly net loss of 2.01 billion francs.
Nevertheless, Credit Suisse proposed an unchanged dividend of 0.70 francs per share, in line with market expectations.
Shares were up around 3 percent in early trading, ahead of the broader European banking index.
“Capital ratios were much better than expected. On a divisional level, results in IWM (International Wealth Management) and IBCM (Investment banking and Capital Markets) were better than expected,” Vontobel analyst Andreas Venditti, who has a “hold” rating on the stock, wrote in a note.
In wealth management, Credit Suisse said it suffered net outflows in the fourth quarter due to clients pulling cash to participate in tax amnesty programs and a decision to drop certain external asset managers.
The bank said all its wealth management divisions had seen positive inflows year to date.
At the end of the fourth quarter, Credit Suisse’s common equity Tier 1 capital ratio, an important measure of balance sheet strength, was 11.6 percent, down from 12 percent in the third quarter but ahead of market expectations.
…Every Country has to do everything else the other Countries do, and have a plus, or a few pluses…
…If a Country, for ideological reasons, for argument’s sake, rejects something all the others do, it can forget about foreign investment.
…The unquestionable Rule of Law (together with it’s speed and enforceability) and the predictability of the Legal and Tax Systems being the two more important considerations prior to any decision on investment.
…And there are a number of Countries that think they comply with the above criteria, but in reality do not.
…And then they ask themselves why foreigners don’t invest more…
Francisco (Abouaf) de Curiel Marques Pereira
(BBG) The Swiss are set to cast their votes on a government plan to change the tax system for big international companies, in a bid to keep the country globally competitive.
Polls ahead of Sunday’s referendum showed the electorate split on the reform, which would allow companies deductions for income from patents and research and development activities. The government says that at new regime is needed to allow Switzerland, which has to give up special breaks for multinationals due to international pressure, to stay attractive as a place to do business.
Voting will end by noon local time and results are expected later on Sunday, with the government also due to hold a press conference. Many voters will already have cast their ballots by mail.
Opponents of the reform, who triggered the referendum by collecting 50,000 signatures, fear it will strain the public purse and increase the burden on the middle class. While proponents concede it will cause a shortfall in government revenue, they say it’s still essential to keep the country, which has already experienced a slowdown in growth due to its strong currency, attractive to businesses.
“This reform is crucial, we need it to remain competitive,” Serge Dal Busco, head of the Geneva cantonal finance department said in an interview. “If it doesn’t pass, all cantons will be hurt.”
Even with the proposed tax regime, which has been years in the making, Switzerland may struggle to keep its standing. The U.K. already has lowered its corporate rate and President Donald Trump has said he wants to cut the U.S. levy by more than half.
The plebiscite is the latest decision that risks damaging the economy in Switzerland, which is one the world’s most affluent countries and regularly tops the World Economic Forum’s global competitiveness index. Following an international crackdown on banking secrecy, stringent limits on executive pay were introduced in 2013 and, the following year, a referendum on immigration quotas threatened to undermine ties with the European Union.
If it passes “this vote will guarantee stability for businesses,” said Gilbert Ghostine, chief executive officer of Meyrin, Switzerland-based fragrance maker Firmenich International SA. “The worst thing for companies like us is uncertainty. As long as we have medium-term and long-term stability, all will be good.”
(EuObserver) Swiss voters have rejected a plan to tighten rules on tax breaks for multinational companies. Fifty-nine percent voted against the measure in a referendum on Sunday. Another proposal to make it easier for third generation residents to become Swiss nationals was accepted by more than 60 percent.
Britain should look to Switzerland when negotiating Brexit and free movement restrictions with the EU, Wolfgang Schäuble, Germany’s finance minister has urged Theresa May.
In an interview with Neue Zürcher Zeitung yesterday, one of Europe’s most influential and veteran politicians advised the prime minister to consider the Swiss model.
“Britons should take as an example how cleverly Switzerland has linked national sovereignty and close co-operation with the European Union,” he told the Swiss newspaper.
Switzerland has access to the European single market through a series of bilateral agreements and has restrictions on free movement migration, although its relationship with the EU remains troubled.
Switzerland rejected membership of the single market via the European Economic Area (EEA) in a 1992 referendum but is a member of the European Free Trade Association (Efta).
Swiss voters backed a referendum for quotas on EU migrant workers in 2014 putting Switzerland on a collision course with Brussels until an alternative “locals first” compromise was passed by the Swiss parliament at the end of last year.
Under the agreement, new jobs must first be offered to Swiss people in addition to an existing work permit requirement for European migrant workers under the terms of its bilateral treaty with the EU.
“I told the British to look closely at how Switzerland found a wise political solution,” said Mr Schäuble in a direct reference to the EU free movement question.
In a speech last week, Mrs May said that Britain would prioritise restrictions on free movement over membership of the single market, a suggestion that does not rule out the Swiss model.
A less attractive prospect for Britain is that Switzerland still faces pressure from Brussels to give the EU courts oversight of migration and its large financial services sector does not have access to the single market. Many of its top banks and insurers are based in the City of London.
The Swiss banking association last year proposed an alliance with the City, Hong Kong and Singapore to negotiate deals on single market access.
Last week, Didier Burkhalter, Swiss foreign minister, said Switzerland would look at closer co-operation with Britain but not an alliance.
He said: “We want good, maybe even closer ties with Britain. But we will not forge an alliance with Britain against the EU.
“We want to improve relations in several fields. It is also an opportunity, if not everything has to be done via the EU.”
(Bloomberg) — Italians, French and Germans topped the list of net newcomers to Switzerland last year, even as the country aims to curb immigration from the European Union following a 2014 plebiscite. Still, the euro area’s reviving economy has helped slow the stream of foreigners compared with previous years. The “mass immigration” vote is set to be discussed when German Chancellor Angela Merkel and Swiss President Johann
Schneider-Ammann meet in Berlin on Wednesday.
Once the United Kingdom has left the EU, it will most likely implement a bilateral ‘Swiss model’, according to a survey of institutional investors, which also showed financial passporting rights are of greater concern to them than restrictions on immigration.
FTI Consulting surveyed 154 global institutional investors, which control more than $10 trillion in assets between them.
Over three-quarters of respondents said that there will indeed be a Brexit and the UK will leave the EU. More than half (58%) said that the outgoing member state would broker a bilateral agreement with the EU, in the same vein as Switzerland’s.
There was an overwhelming consensus that the UK will go for a Swiss model rather than an EEA or WTO agreement. Only 14% and 11%, respectively, thought it more likely that Theresa May’s government would go down this route.
Louise Harvey, the chair of FTI Consulting Brussels, said that “the shape of trade rules between the UK and the rest of the world is a £1 trillion question,” referring to the amount of trade Britain gets through every year.Passporting rights
In terms of what impact Brexit will have on the UK, only 52% thought it likely that Britain will lose its lucrative financial passporting rights, while a resounding 80% said that immigration restrictions will apply once the UK is out of the bloc.
However, 68% of those surveyed said that they are concerned about the passporting issue, while barely half said that immigration constraints worried them.
Passporting allows a firm registered in the EEA to carry out its business in any other EEA country without having to seek approval in every one of them. Multinational companies see it as an invaluable asset in doing business cross-borders, as it significantly cuts the amount of red tape involved.
The prospect of the UK losing its rights has prompted fears that London will lose its status as one of Europe’s major financial hubs, as companies and banking institutions will up sticks to the mainland.
Which kind of deal the UK will go for during its negotiations has long been a topic of discussion. Before the 23 June referendum in the UK, many in the Leave camp touted the Norwegian model as a viable option.Swiss model popular among investors
But the Swiss model is clearly popular among investors, as evidenced by the survey’s results. Switzerland, which is not part of the EEA, has had to negotiate some 100 bilateral agreements so as to ensure it can access the EU’s markets and associated agencies like Europol.
The first major trade negotiations took eight years to conclude, well above the two years that the UK has to reach an agreement with the EU, once it triggers Article 50.
This is a package deal that covers not only the internal market but also issues such as the free movement of workers. The whole agreement was thrown into flux by Switzerland’s decision to curb free movement of workers.
British hopes of a precedent being set by the Swiss on free movement and single market access were obliterated in September when Bern decided to scale back its plans to curb EU immigration, instead plumping for local preference on job hires. The plan will be debated later this year in December.
The decision on future UK-EU relations will not rest entirely in Britain’s hands and it could be more a question of Westminster accepting what it’s given.
Trade has, unsurprisingly, emerged as one of the most pressing factors of the lead-up to the negotiations, which Theresa May has promised will start at the end of March 2017. The UK’s total trade volume was £1.065 trillion back in 2014, with 48.79% of that being with the EU.
“London processes $1.2tn a day of deals denominated in a variety of currencies. Euro-denominated swaps account for just over half the total, according to the Bank of England.”
To give you an idea of what one trillion is…
The United States GDP was, in 2015, 17.947tn USD.
And that represents 28.95 percent of the world economy.
And this volume of transactions is going to move elsewhere?
No it is not, in my opinion.
Francisco (Abouaf) de Curiel Marques Pereira
(BBG) Switzerland announced a diplomatic offensive to open national borders to its banks and asset managers, calling Britain’s vote to leave the European Union an opportunity for the Continent’s largest financial center.
The country of more than 250 banks, including UBS Group AG and Credit Suisse Group AG, will seek to negotiate agreements with nations that have significant potential or are already of great importance for the Swiss financial center, the government said Thursday in a report setting out its goals for the industry. It listed Germany, the U.K., France, Italy and Spain as among countries considered a priority for market-access treaties.
“Although the financial centers of Switzerland and the U.K. are closely linked, they also compete against each other,” the report said. “While asset management and investment banking are well-established strengths of London’s financial center and are likely to remain so, Switzerland can build on its strong position in the area of cross-border asset management.”
The government also plans to seek EU acceptance of Swiss regulations and supervision in areas including investor services, trading platforms, funds and derivatives trading. To that end, the Swiss secretary for international financial matters will intensify talks with EU institutions and key countries, the government said.
In other positions announced Thursday, the government pledged to remove barriers for technology companies and, in a nod to a frequent complaint from the industry, conduct comprehensive studies of the economic impact of regulation. Since its last policy update in 2012, Switzerland has focused on making its banks safer, adapting its financial regulations to those in the EU and dealing with an international crackdown on tax evasion.
“In the past years, we were under pressure and sometimes on the defensive,” Swiss Finance Minister Ueli Maurer said at a news conference in Bern. “We are going from the defensive to the offensive.”
The U.K. vote in June to leave the EU brought new urgency to the question of market access for non-EU countries including Switzerland and the U.S., as many of their companies sell financial products through London. Switzerland hosts the region’s biggest financial center after London.
“It’s particularly noteworthy that the government for the first time makes a commitment to a better promotion of the financial center abroad together with the industry,” the Swiss Bankers Association said in an e-mailed statement. The sector contributes 13 percent to the economy, including indirect effects, and boasts the largest share of the cross-border wealth-management market, according to the SBA, the main industry group.
Brexit threw into question the future ability of Swiss firms including UBS and Credit Suisse to use London as a gateway to the EU for activities such as investment banking. Unlike the financial hubs of Dublin or Frankfurt, Switzerland cannot offer all the benefits of so-called passporting because it lacks a comprehensive financial services agreement with the bloc.
Switzerland hit a road block in negotiations with the EU on a range of topics when it voted in a 2014 referendum to limit immigration in violation of the bloc’s principle of free movement of people. This has also made a wholesale agreement for the financial sector with the EU less likely.
“The British referendum was also negative for the negotiations between the EU and Switzerland,” the secretary for international financial matters said in a statement. “The Swiss dossier has become less of a priority. ”
“An advantage of Brexit is that we will hopefully gain a good partner outside the EU with a similar stance regarding open markets and a similar regulatory philosophy.”