Switzerland Today

Greetings from Bern!

Here are the latest news and stories from Switzerland, where bells at several cathedrals across the country rang out at midday for peace. In Bern’s Münster cathedral (pictured) the bells rang for seven minutes to mark the seven days of war in Ukraine.

Keystone / Martin Ruetschi

In the news:  Young people in Switzerland smoke less, have moved to the left politically and are less homophobic and racist than ten years ago. On the other hand, they drink more and do less sport.

• The “Young Adult Survey Switzerland”, published today, found that young adults are for the most part responsible and generally satisfied with their lives. However, the proportion of young adults with suicidal thoughts increased.
• Swiss International Air Lines (SWISS) has posted an operating loss of CHF427.7 million ($465 million) for 2021. However, this is a third less than the CHF653.8 million lost in 2020.
• Justice Minister Karin Keller-Sutter has repeated her plan to activate a special permit for Ukrainians fleeing their country owing to war. The Swiss S permit, for “people in need of protection” would allow Ukrainians to stay in Switzerland longer than the 90 days allowed under the Schengen agreement, and to apply for employment, albeit provisionally.

© Keystone / Leandre Duggan

After Switzerland took the historical step on Monday of imposing economic sanctions against Russia to align them with Europe and the United States, its commodities trading ecosystem – a key cogwheel for Russian exports – is having to adapt.

Switzerland is where three-quarters of Russian crude oil and oil products are managed and where Nord Stream 2, the controversial Russian gas pipeline project, has been headquartered – until recently. Two days ago it was reported that Zug-based Nord Stream 2 had made more than 140 of its employees redundant as a result of the sanctions.

Switzerland is also a major hub for Russian and Ukrainian grain and vegetable oil trading. Specialised banking services provide credit to traders, and shipping companies fill another important piece of the trading system.

The situation in Ukraine means that their operations are being hit, including access to commodity sources and credit, as well as to insurance and shipping.

Commodities expert Giacomo Luciani says traders are currently responding to the intentions of most Western governments, reluctant to prompt higher prices following any reductions in energy supplies. They are keeping the flow of products from Russia for now, albeit at higher transactional costs. But he expects the situation to change in the longer term.

“Down the road, we will see deliberate actions and policies to progressively reduce [the West’s] dependence on Russian oil and gas, probably affecting oil before gas, by way of discouraging the export of oil products from Russia,” Luciani said.

Wheat and corn prices are already soaring, and there is growing concern that disruptions in supplies will affect food security, particularly in the Middle East and Africa, top buyers of Russian grain.

As long as the war continues, there will be bottlenecks for supplies of food commodities, said Ivo Sarjanovic, a lecturer at the University of Geneva’s commodity trading programme. “Buyers will have to pay more, switch to alternative sources or eventually run out of stocks.”

Keystone / Sebastien Nogier

Just when Credit Suisse thinks things can’t get any worse – they do. The latest scandal to hit Switzerland’s second-biggest bank involves oligarchs, yachts – and shredders.

The Financial Times has reported how Credit Suisse asked hedge funds and other investors to destroy documents relating to its richest clients’ yachts and private jets, in an attempt to stop information leaking about a unit of the bank that has made loans to oligarchs who were later sanctioned.

Investors this week received letters from the Swiss bank requesting that they destroy the documents relating to a securitisation of loans backed by “jets, yachts, real estate and/or financial assets”.

The letters tell the investors to “destroy and permanently erase” any confidential information Credit Suisse previously provided in relation to the transaction, citing a “recent data leak to the media” that it said had been “verified by our investigators”.

Credit Suisse took the action after a Financial Times report last month detailing how it offloaded the risks relating to $2 billion (CHF1.84 billion) of loans to a group of hedge funds.

“I don’t think we’ve ever had a request like this,” said one investor who received the letter, noting that his firm had only ever received similar notices when it had been sent confidential documents accidentally.

Credit Suisse declined to comment.

The attempt to stop clients leaking confidential information came after Credit Suisse was also hit with an extraordinary leak of documents detailing the accounts of 30,000 of its customers. The so-called Suisse Secrets papers pulled back the veil of Swiss banking secrecy, revealing the lender’s ties to oligarchs, corrupt government officials and drug smugglers.

Copyright The Financial Times Limited 2022