Swiss regulators and politicians should stop over-reacting to “errors” made by companies if the country is to remain competitive, the joint annual meeting of private banks and wealth managers has warned.
The message follows years of increasing regulation and steep fines imposed on the Swiss financial industry in the wake of the banking crash, interest rate rigging, money laundering and tax evasion scandals. Switzerland is not the only country to have faced such difficulties, but domestic financiers have often complained of being hit harder than other states.
Julius Bär chief executive Boris Collardi added his voice to the argument on Thursday, calling for a
“departure from the zero-error tolerance in corporate matters”. He was speaking in his capacity as chairman of the Association of Swiss Asset and Wealth Management Banks.
He also demanded the “curbing of our home-made regulatory jungle”, referring to the so-called ‘Swiss finish’ regulations that go further than most countries in insulating Switzerland against another financial meltdown. Swiss banks typically have to set aside more capital to cover risk than foreign competitors.
This is particularly relevant following the “many uncertainties surrounding the Brexit process”, Collardi added. Britain’s impending exit from the European Union could result in it losing its passport to trade financial services across member states. This has led to speculation that banks could trim down their presence in London in search of a more secure EU base.
Collardi is by no means the first prominent banker to make such statements. They are regularly heard from the Swiss Bankers Association and are backed up other heavyweight individuals, such as UBS CEO Sergio Ermotti.
Switzerland is currently overhauling its financial rules to better match those in the EU and reforming its corporate tax system in relation to foreign multinationals. Until these tasks are performed, continued access to EU markets is by no means assured.
Voters will get a say on parliament’s corporate tax reform proposal in a referendum on February 12. Yves Mirabaud, chairman of the Association of Swiss Private Banks, urged voters to accept the reforms.
Repeating calls from past years, he added that it is vital for Switzerland to maintain the same level of access to EU markets.
“Private banks depend on foreign specialists more than many other players,” he said, “Because our domestic skills pool is nowhere near big enough for the volume of our operations.”
Another lobby group voicing its opinion on Thursday was the Swiss Business Federation (economiesuisse), which also called for corporate tax reforms to be given the green light and for Swiss-EU ties to be maintained.
At its separate annual press conference, economiesuisse also called on regulators to keep up with the rapid digitalisation of the Swiss business world without stifling innovation. Chairman Heinz Karrer complained that the authorities historically had a habit of reacting to changes with new, and stifling, regulations.
On the other hand, there was a danger of obsolete rules staying in place that no longer matched the changing workplace, Karrer added.
“Politicians do not help our economy or society by smothering the country with innovation-inhibiting, protectionist or anti-competitive regulations,” he said.