Hayek calls for reforms of financial system
Switzerland's king of watchmaking, Nicolas G. Hayek, has called for rapid and sweeping reforms of the global financial system to allow innovation to flourish.
Hayek, who is chairman of the world’s largest watchmaking group, Swatch, argued on Friday that Switzerland could play a pioneering role in showing other countries the way forward.
In a passionate speech in Baden at the annual Economy Day of the Swiss Business Federation (economiesuisse), the 80-year-old said reforms of stock exchanges and the financial system were sorely needed.
“What’s wrong is that every time we create new wealth, new products, new factories and new jobs through innovation, they are destroyed by the financial system, which in the last century has gone through eight crises worldwide,” he told swissinfo.
Asked how we should get out of the present dilemma that was triggered by the subprime mortgage crisis in the United States, Hayek had no doubts that bankers should no longer be allowed to act alone.
“We should not let only bankers run and control the financial system but have a joint venture with real entrepreneurs, industrialists and financial people to reorganise it all.”
Reform
Hayek, sporting four watches – two on each wrist – said he wanted the message of reform to come from Switzerland and spread worldwide. He added he would go to the North Pole if he could find the right people and credibility there.
“I don’t want it to start from Switzerland but it’s the only country from where you can start it.
“In the United States they won’t have enough credibility, in Britain they won’t have it, the Germans won’t start it and the French neither. The Chinese are not interested in it and the Indians neither. Who else is going to do it? We are forced to do it,” he said.
Hayek, who had Switzerland’s leading entrepreneurs spellbound with his speech, later explained to swissinfo how the reforms would help innovation.
“In that they won’t destroy it any more. The problem is that if I have a company and somebody or a fund comes along and buys 20, 30 or 40 per cent [of it], they come and say they want next year’s dividend to be much higher, and I don’t have enough money to make innovation any more. We’ve seen this a lot lately.
“We’re going to tell all these people that we’re not going to sell you part of our shares, or if we are, you are going to sit down and continue innovation with us.”
Fantasy
In other remarks, Hayek pleaded once again for people to keep the fantasy they had when they were young to promote innovation.
“Remember when you were six years old. We played in sand, built castles, our imagination knew no boundaries, we believed in many legends, in beautiful princesses, fairy tale kings and Father Christmas.”
He said society, the army, education and jobs had all contributed to many people losing their imagination, spirit of innovation and creativity.
“Because of that I’ve been preaching to my colleagues, staff and friends to keep all the fantasies they had when were six.”
swissinfo, Robert Brookes in Baden
On being an entrepreneur: “The only obstacles which cannot be overcome and which cannot be prevented are death and taxes.”
“The experience of the last decades and various articles from respected newspapers show that the accuracy of some financial analysts’ forecasts are not as good as those of a fortune teller who uses a crystal ball.”
“The entrepreneur has to lead his firm with its long-term interests in mind, and not chiefly to please stock exchange participants in the short term.”
Born in 1928, Nicolas G. Hayek played a decisive role in reorganising and merging the ASUAG and SSIH watch groups at the beginning of the 1980s when the Swiss watch industry was in crisis.
With a group of investors he took over a majority shareholding in what is now the Swatch Group in 1985.
Over the years, Hayek has been presented with a number of prestigious academic and public awards.
He was made an officer of the Légion d’Honneur of France at the end of 2003.
Hayek is an honorary citizen of the watch-making town of Biel in February and cited as the saviour of the Swiss watch industry.
He still has a consulting firm, Hayek Engineering.
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