swiss banks at crossroads as secrecy goes up in smoke
Last Updated : GMT 02:57:08
Arab Today, arab today
Arab Today, arab today

Swiss banks at crossroads as secrecy goes up in smoke

Arab Today, arab today

Arab Today, arab today Swiss banks at crossroads as secrecy goes up in smoke

Under heavy pressure from international regulators after the global financial crisis
Geneva - AFP

As Switzerland's long-cherished banking secrecy practices evaporate, the institutions that helped create the world's largest offshore tax haven are dramatically rethinking their business models in a bid to survive.
Already reeling from the painful process of making amends for allowing foreign nationals to hide assets from the taxman back home, the secretive sector is now bracing for another seismic shift.
Under heavy pressure from international regulators looking to root out shady practices after the global financial crisis, the wealthy Alpine nation has agreed to phase out its long tradition of banking secrecy and open the way to the automatic exchange of bank data.
The shift from the long-held mantra among Swiss bankers that accounts should be taxed, but that all information about them should remain confidential, is driving "structural change in the sector", the Swiss Bankers Association (SBA) said this month.
"It must be expected that ... a number of institutions in the Swiss banking centre will shut their doors or will be acquired," it warned.
That trend has already become apparent with the raft of mergers announced in the sector this year.
There was J. Safra Sarasin's purchase of US giant Morgan Stanley's Swiss private banking business, while Britain's Standard Chartered said it is looking to sell its Swiss wealth management business.
Julius Baer, one of Switzerland's largest banks, also recently announced it would take over the Swiss private banking operations of Israeli lender Bank Leumi.
Rumour even has it that Julius Baer itself could soon be swallowed by Switzerland's second-largest bank, Credit Suisse.
Last month, auditor PricewaterhouseCoopers estimated around 20 percent of all Swiss banks could eventually go under.
"A lot of banks, especially those of a certain size, are looking forward to positioning themselves on the future private banking model," said Martin Schilling, head of financial services in Switzerland at PwC.
- Survival of the fittest -
"All banks will not, however manage, to adjust," he told AFP, adding that "there will clearly be further consolidation in the market".
The industry has also been weakened by Washington's crusade to get Swiss banks to make amends for allegedly helping to cheat US tax authorities out of billions of dollars.
More than a dozen Swiss banks have been placed under criminal investigation by the US Justice Department, with some already hit by crippling penalties.
Credit Suisse swung to a loss in the second quarter after it was slapped with a hefty $2.6-billion (2-billion-euro) fine.
Many others have signed up to a scheme where they acknowledge they may have unwittingly helped US citizens dodge taxes and agree to pay large fines to avoid criminal prosecution.
Industry giants like UBS and Credit Suisse will weather the storm, but a number of smaller banks are under threat, observers say.
After analysing the annual reports of 94 private banks in Switzerland, KPMG and Switzerland's University of St. Gallen found more than one third were in the red.
Those that survive will be forced to rapidly rethink their business models, observers say.
As suspicion of the offshore banking model that long served as a cash-cow for Swiss institutions grows, bankers are shifting to managing clients' assets inside the countries where they reside.
But there is a downside to "onshore banking" too: differing regulatory frameworks mean banks must do three times as much business serving clients abroad to rake in the same profit they make on their Switzerland-based activities.
The Internet is also helping chisel away at the once unshakable standing of Switzerland's age-old institutions, since clients can easily see how much more they sometimes charge than rivals without always showing better results, Geneva University finance professor Osmond Plummer told AFP.
In a sign of the changing times, three ultra-discrete Swiss private banks -- Pictet, Lombard Odier and Mirabaud -- late last month published their first results since they were founded some 200 years ago.
"This is a sector that changes very slowly," Plummer said, stressing that Swiss banks would now need far more than their reputations to get by.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

swiss banks at crossroads as secrecy goes up in smoke swiss banks at crossroads as secrecy goes up in smoke

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

swiss banks at crossroads as secrecy goes up in smoke swiss banks at crossroads as secrecy goes up in smoke

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Japanese regulators raid Airbnb

GMT 00:44 2017 Monday ,20 November

Japanese regulators raid Airbnb
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Saudi, Bahrain target Iran

GMT 00:48 2017 Monday ,20 November

Saudi, Bahrain target Iran
Arab Today, arab today Europe turns on Facebook, Google

GMT 02:26 2017 Monday ,20 November

Europe turns on Facebook, Google
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Driverless, electric future just round

GMT 02:45 2017 Monday ,20 November

Driverless, electric future just round
Arab Today, arab today Tesla unveils its all-electric semi truck

GMT 02:59 2017 Saturday ,18 November

Tesla unveils its all-electric semi truck
Arab Today, arab today Hanan Metawe denies apology for “Major Treason”

GMT 12:22 2017 Thursday ,16 November

Hanan Metawe denies apology for “Major Treason”
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 02:28 2017 Saturday ,18 November

Anti-drug operation nets 4 tonnes

GMT 01:34 2017 Friday ,17 November

Banyan Tree Phuket Takes Festive Season

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday