Last April marked the debut for Switzerland's ultimate financial center mission: representatives of the Swiss Bankers Association, or SBA, under president Herbert Scheidt accompanied a high-ranking delegation led by Swiss finance minister Ueli Maurer to Asia's finance hot spots.

The Swiss bankers and overseers visited Beijing, Shanghai, Hong Kong and Singapore in a bid to tout Switzerland as a modern, expandable, and reliable financial center for Asian firms. In February, the group hit the road again for a four-day visit to Saudi Arabia, where the crown prince was then midway through a corruption crackdown, and the United Emirates. Scheidt, head of the SBA, said «We are grateful for the engagement of the government and officials for Switzerland's financial center. We have a competitive financial center whose future relies on the optimal framework, which we are designing together with the government.»

Junket's «Substantial Sum» 

What Scheidt didn't mention was that both diplomatic missions were paid for by Swiss banks. Last year, the SBA's board decided on a project to promote Switzerland's financial center abroad as part of a public-private partnership. The body, made up of 18 other Swiss bankers besides Scheidt, granted «a substantial sum» for the push, according to several sources familiar with the matter.

The move illustrates that the SBA may not be the uncontested industry voice it once was, but can still marshall members ranging from tiny retail lenders to giants UBS and Credit Suisse. However, the smaller, domestic banks insisted that future overseas marketing missions be paid for by those firms which benefit – the heavyweights as well as private banks.

Breach of Trust?

The problem? The SBA is still paying for the promotion activities out of its general budget, according to several sources – the one which all members from minnow to shark pay into. This has infuriated the smaller lenders, which feel their trust has been violated. The budget snafu has set off «extensive debate» on the SBA's board, a source told finews.com.

The SBA, which was instrumental in helping settle major scandals in the past like that over Holocaust accounts, didn't comment to finews.com, saying it never comments on financial matters. A spokeswoman highlighted an online promotional platform which is meant to be developed by the private sector together with the Swiss government. The aim? To portray the merits and advantages of Switzerland abroad as well as domestically – meaning the funds are being used at home as well.

Joined in Word Only

The tussle highlights the divide in the once-solid fraternity of Swiss bankers, between smaller firms and foreign-minded ones. «There are some issues where all the big firms, private banks, and domestic lenders have in common is the word 'bank'», Valiant boss Markus Gygax told Swiss business paper «Finanz und Wirtschaft» (in German, behind paywall) recently.

The banks have already begun grouping themselves for better political lobbying: UBS and Credit Suisse, for example, maintain a Brussels-based interest group. Domestic lenders have focused more on schmoozing in the chambers of Swiss parliament. A lobby of Swiss regional banks will be launched next month. 

As for the SBA, the lobby went on a McKinsey-ordered diet three years ago. Among the high-paid consultants' recommendations? The SBA needed to intensify its «dissent management». As the interests of various banks in Switzerland diverge, this seems more timely advice than ever.