Luqman Arnold, the head of Switzerland's biggest bank, UBS, says the corporate world must remain steadfast in the face of new challenges after the US attacks in September.This content was published on November 10, 2001 - 10:51
In a recent speech to the Swiss-American chamber of commerce, Arnold said September 11 was a defining moment in world history when people started to rethink the principles of the political and economic order.
"That day most of us realised we'd been living in a period of international stability, where major conflicts seemed remote," said Arnold. "But it was an illusion to think peace could be taken for granted. With the fall of the Berlin Wall, we no longer focused on many of the local conflicts that were erupting. We focused on the peace dividend instead."
Arnold added that since the attacks in the US, people had been reminded of the strong link among freedom, security and prosperity and how fragile all were when any one was targeted.
The attack on the World Trade Centre in New York was aimed at the very heart of the world's global financial centre. It demonstrated the vulnerability of the world's only superpower to a determined group of assailants.
Freedom and the market
But Arnold said it had failed to destroy the heart of world financial markets because the market centre, he said, is invisible. Quoting the liberal economic thinker, Adam Smith, Arnold said the market centre lies in the free minds of individuals making their own choices.
But Arnold conceded that the events on September 11 were likely to have a negative effect on the world economy.
"In economic terms, the events of September 11 reinforced the sharp economic downturn in the United States that had already begun. That downturn is now almost certain to end in a recession. This is, indeed, a new world after such an extended period of growth."
In the wake of the attacks, the US has responded by trying to build a wide-ranging coalition against the Afghan regime it accuses of harbouring the chief suspect, Osama bin-Laden.
It has argued that there is no middle way in its " war against terror" and says other nations must align themselves for or against the struggle.
Quick Swiss response
Switzerland had already blocked funds associated with the al-Qaeda network a year ago but Arnold said Switzerland was quick to respond to American calls for solidarity by setting up the task force, 'Terror USA'.
Arnold says the task force has improved co-operation between law enforcement authorities in the two countries and that Switzerland has lifted bank client confidentiality on matters related to US requests.
This proved once again, he said, that Swiss banking secrecy laws would not protect criminals.
"Switzerland is widely recognised by experts as having one of the most stringent money laundering laws in the world.....even broader than the EU's new proposed directive on money laundering."
UBS itself, he added, had tightened its own scrutiny of accounts in the wake of the attacks.
But Arnold admitted that Switzerland still suffered an image problem abroad because its tough stance against dirty money was not recognised by a larger constituency of opinion.
"Switzerland has achieved a fine balance between freedom and security, which has been decisive in building its prosperity," he said, "Privacy has certainly been a key ingredient. Over the years, the Swiss have also proven their ability to protect their system against abuse. Today, Switzerland is a leader in the anti-money laundering drive. I would encourage the Swiss to be a little more outspoken on this achievement."
Finally, Arnold called on the corporate world to keep its nerve after September 11 and to remain true to its core beliefs.
"We shouldn't forget that the basic principles of business are always the same. UBS will stick to these principles and stay alert to what tomorrow's challenges might be. Fire is the test of gold, adversity of strong men."
By Michael Hollingdale
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