National Bank upbeat about economy

The president of the National Bank, Hans Meyer (pictured), has given an upbeat assessment of the Swiss economy. However, he also expressed concerns about the integrity of Swiss banks.

The president of the National Bank, Hans Meyer (pictured), has given an upbeat assessment of the Swiss economy. However, he also expressed concerns about the integrity of Swiss banks.

Meyer told the bank’s annual general meeting on Friday that the economy was stronger, but warned that there were growing risks to economic stability.

“We are now closer to the goal of a balanced economic development – steady growth with high employment – than we have been for many years,” he said.

He added that there were three main reasons for this: efforts by Swiss businesses, international economic growth and favourable monetary conditions. But he said the downside was a growing risk to stability for the economy as a whole.

More specifically, Meyer warned of the danger of losing sight of the need to ensure that economic conditions were improved in a socially acceptable manner. In this respect, he said he expected the drop in unemployment to lead to upward pressure on wages.

But Meyer also appeared to have concerns about the stability and integrity of Swiss banks. He devoted a large part of his speech to the sector, which has been caught up in the money laundering scandal involving Nigeria’s former dictator, General Sani Abacha.

“Political and economic stability, a good infrastructure, the rule of law and the quality of services are important factors for lasting success,” he said. “However, it must be supplemented by a reputation, which rests on a solid business mentality.”

This, he indicated, is where Swiss banks were lacking, and urged extreme caution in handling banking secrecy. He recalled that there was growing pressure from the European Union on Switzerland’s banking secrecy, because it is commonly used by EU citizens to avoid paying taxes, as tax evasion is not a crime in Switzerland.

Meyer also told the general assembly that the bank would go ahead as planned with the sale of gold reserves next month. On May 1, a change in the law to formally abandon the gold standard will allow the National Bank to make the sales. It plans to sell 1,300 tonnes of gold.

swissinfo with agencies