Switzerland Today

Dear Swiss Abroad,

In Wednesday’s briefing, news of a favourite Swiss pastime – paying for things in cash – and a looming housing market crunch. Tomorrow, Ascension Thursday, there’ll be no briefing in your inbox. We’ll be back on Friday.

© Keystone / Peter Klaunzer

In the news: Switzerland’s tumultuous finance sector.

• UBS said today it expects a financial hit of about $17 billion ($15.24 billion) due to the takeover of Credit Suisse. This is due to the investment portfolio inherited from Credit Suisse as well as looming litigation costs. UBS nevertheless said it expected to register a one-off gain of $34.8 billion after it bought Credit Suisse for a fraction of its book value in March.
• The Swiss finance ministry has set up an expert group to study the role of banks and too-big-to-fail regulations in the wake of the Credit Suisse meltdown. The group will “evaluate strategic considerations on the role of banks and the framework conditions at federal level with regard to the stability of the Swiss financial centre”. Findings are expected by mid-August 2023.
• A Swiss cryptocurrency scheme, purportedly set up for educational purposes, has been shut down by regulators after having “seriously violated supervisory law”. The Dohrnii Foundation and its founder Dadvan Yousuf sold more than CHF6 million worth of crypto tokens without the required financial licence, authorities said today. Media have also reported that prosecutors have launched criminal proceedings against Yousuf for alleged fraud.

© Keystone / Gaetan Bally

The Swiss constitution: focussed on money

Unlike some other countries, Switzerland remains attached to cash. Not even the pandemic, nor the rise of card usage and payment apps in recent years, have changed this. Cash (often very high-denomination banknotes) is still the most used payment method, just ahead of debit cards.

The situation is now even less likely to change. Today the government proposed a project to anchor notes and coins in the constitution. The plan is a direct response to the so-called “cash initiative”, submitted in February by a libertarian-type group worried about the impact of cashless-ness on citizen freedoms. The government said that while the initiative text was too vague for its liking, it agreed with the fundamental demand: as such, it proposes to directly transpose two legal references to cash and currency from law to constitution.

Whether this counter-proposal will be enough to convince the campaigners to withdraw the original people’s initiative remains to be seen. The public is likely to vote on it at some point in the future. In the meantime, Keystone-SDA reports, the libertarian group have launched a second initiative – demanding the right to be able to pay in cash for all important services such as public transport or supermarkets.

© Keystone / Martial Trezzini

Housing crunch: city and federal authorities searching for ideas

In this election year 2023, various issues – many of them linked – are battling to be at the forefront of debates. Gender, the future of work, and immigration are all up there. In the past few days and weeks we’ve also heard a lot about housing: like in many other European countries facing demographic shifts and movements, accommodation shortages and rising rents are looming on the horizon.

Yesterday, authorities in Switzerland’s biggest city Zurich presented plans to ease pressure in the notoriously expensive metropolis. The “funding living space” project, to be put to voters on June 18, proposes pumping CHF300 million into buying land, building new apartments, and renovating existing ones, Le Temps reportsExternal link – all under condition that the housing provided will remain affordable, i.e., less than the median rent price in the municipality.

In a city where rents have increased by 40% in the past two decades (way beyond wage inflation), the initiative is an attempt by authorities to regain some control over the situation, Le Temps writes – the key word however being “attempts”.

At the national level, concrete plans are so far slower to materialise: but last week, Economics Minister Guy Parmelin got some momentum started by hosting a much-reported “roundtable” (SRF reportsExternal link) with various real estate representatives.