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(Bloomberg) -- Switzerland’s private banks may attract Swiss franc deposits from international clients worried about the future of the European monetary union, according to Geneva- based banker Eric Syz.
The surge in the currency after the Swiss National Bank abandoned its cap underlines the country’s appeal as a sanctuary from political and economic uncertainty, according to Syz, who owns more than 92 percent of his Geneva-based private bank and asset-management company, Banque Syz & Co. SA.
“One should not forget the indirect consequences that can be positive,” Syz, 57, said in an e-mailed response to questions. “It’s perceived as a safe haven in the current worries on the future of the euro. If the euro falls as a consequence of the ECB’s monetary policy, we could see significant inflows into Swiss private banks.”
An infusion of francs would help Swiss wealth managers counter pressure on profitability since the SNB’s surprise move earlier this month. Foreign currencies including dollars, euros and pounds account for most income from international clients, while expenses tend to be in francs.
Syz expects the euro to hover around parity with the franc for “the months ahead” and may “temporarily decline below parity” if tensions over Greek finances increase. The European Central Bank’s quantitative easing program may also add “downward pressures” on the currency, while political uncertainty in Portugal, Spain and the U.K. may encourage investors to seek safety and stability in Switzerland, he said.
Banque Syz hasn’t decided whether to pass on the SNB’s 0.75 percent charge on deposits. The bank will not impose a blanket charge affecting all customers, he said.
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