Idea floated for alliance of non-EU financial centres

Patrick Odier, who will step down as chairman of the Swiss Bankers Association in September Keystone

The Swiss financial centre’s leading professional organisation is proposing joining ranks with other top non-European Union financial centres to more closely coordinate efforts to ensure access to EU markets.

The Swiss Bankers AssociationExternal link has begun floating the idea anew of a plan for Switzerland to form an informal alliance with banking interests in Hong Kong, London and Singapore. The plan, formulated by the association’s outgoing chairman, Patrick Odier, would allow the countries to pool their resources in coming up with ways to keep operating efficiently in the EU.

The renewed proposal to create a “F4” alliance, first reported by the Financial TimesExternal link on Thursday, comes in response to the “Brexit” vote on June 23 for Britain to leave the EU. Because of the vote, London’s financial services would operate outside the EU bloc, like the Swiss.

The Swiss Bankers Association on Thursday also announced that Herbert Scheidt had been elected to serve as the new chairman, succeeding Odier in mid-September. Odier has served as chairman for seven years. Scheidt is chairman of Swiss private bank Vontobel.

The European Union is threatening to freeze non-EU financial institutions out of the market unless they have a physical presence in one of the member states. Smaller Swiss banks and independent asset managers have taken fright at the proposed rule change that would dramatically increase their costs. 

Once Britain leaves the EU, its financial firms could face similar problems getting an ‘EU passport’ to operate in the bloc. Securing future access to EU financial markets will be one of the key issues for Brexit negotiators on the British side. Failure to do so would spell major trouble for the city of London.

Swiss asset management

About a quarter of the world’s cross-border asset management is conducted in Switzerland, far more than anywhere else, but Swiss financial services have been able to access EU markets through bilateral deals.

It is not the first time that the Swiss Bankers Association proposed an “F4” alliance, according to minutes of a 2012 meetingExternal link. According to the association’s spokesperson, Sindy Schmiegel Werner, the aims were to create international standards, improve competitiveness and boost credibility as a contributor to society.

But the idea has not yet been formalized amid regular dialogues between representatives of the various non-EU banking and financial centres, Schmiegel Werner told swissinfo.ch.

“In this respect, Patrick Odier’s idea was to re-establish a constructive and future oriented societal dialogue, which is even more important in times of economic weakness,” she said. “A key factor to success is that the initiative needs to regroup the respective regulatory and governmental authorities and the industry representatives of all involved countries.”