Ten years after the financial market was rocked by the biggest crisis in decades, the Swiss private bankers and wealth managers are doing as well as ever: with $2.4 trillion in offshore assets, the Swiss wealth management hub is by far bigger than its closest rivals. Singapore and Hong Kong for instance together have «only» $2 trillion under management belonging to people resident in other jurisdictions.

The representatives of Swiss wealth management are using their relative position of strength to demand support from the government for their industry, which employs some 16,400 people in Switzerland alone.

Access to EU Market Remains Essential

The Association of Swiss Private Banks and Association of Swiss Asset and Wealth Management Banks together have 35 member firms and a total of 26,000 employees. They say that the creation of wealth in Switzerland is under threat if the country rejects the new framework agreement with the European Union that is intended to replace an existing set of bilateral agreements.

Part of the deal is a better access to the European market for banks. About 1 trillion francs managed by Swiss banks belong to citizens who live in the EU, according to Yves Mirabaud, the head of the private bank association and senior managing partner of Mirabaud private bank.

No Deal Will Harm the Economy

The distinguished banker from Geneva has little time for the arguments of the nationalist Swiss People’s Party that objects to the agreement and wants to see an end to the current deal with the EU: «I find it difficult to understand the arguments used by the People’s Party,» said Mirabaud at the annual press conference in Bern. «The framework agreement will strengthen the position of Switzerland.»

If Switzerland decides to reject the deal, the relations with the EU will sour and the current deal will come to an end. This would harm the Swiss economy and hence also affect the population, the bankers are convinced. A study recently showed that Switzerland is profiting greatly from the economic dynamic generated by the common market. Opponents claim that Switzerland is far too important as an economic partner for the EU to turn its back on it.

Lower Dividend Taxation Demanded

The twin associations also want the government to provide more support to the financial market in respect to taxation and data protection. Compared with other countries, Switzerland has a fairly lean administration and therefore relatively low taxes. This does not apply to the financial market however, said Marcel Rohner, the head of the Association of Swiss Asset and Wealth Management Banks.

The stamp duty and withholding tax put an additional burden on the Swiss financial market. Rohner wants the government to swiftly follow through with its plans to reduce the withholding tax on dividend payments from a current 35 percent to 15 percent.

Cyber Security Is a Top Priority

Banks will have to cooperate amongst themselves and with the government to confront the challenge posed by cyber criminals, Rohner added: «It is becoming increasingly difficult for individual financial players to defend themselves against large-scale attacks on their own. The creation of a national competence center for cyber security for the federal government must therefore be pursued as a matter of priority.»

Tomorrow Friday, the two associations will put their focus on the annual private banking day in Lucerne on the issues of data protection and security.