For once, Swiss banks are currently experiencing something completely new. The US is exerting strong pressure on Switzerland - and the banks find themselves in the role of uninvolved spectators.

For decades, the pattern was different: the US and other countries used globally active - and therefore exposed - banks as leverage to extract concessions from Switzerland and its financial institutions, including settlement payments and changes to tax laws regulations.

The Controversy Surrounding Dormant Assets

One episode deeply etched in the collective memory of the generation now prominent in politics and business is the 1990s dispute over dormant assets. It centered on accounts, mostly opened by foreigners at Swiss banks before the Second World War, that were considered «dormant».

Following a professionally orchestrated campaign by interest groups such as the World Jewish Congress and US politicians, Credit Suisse and UBS paid $1.25 billion into a fund «for Holocausts survivors» in 1998 (although the search for enough eligible claimants later proved to be quite tricky). The meticulous investigation of accounts also resulted in high internal and external costs for the entire banking industry.

Switzerland was also involved - not only through tax losses from reduced bank profits. The Swiss National Bank (SNB), which also came under criticism, contributed 100 million Swiss francs to a separate fund for Holocaust victims in October 1998. The episode is key to understanding the SNB's subsequent gold sales.

The Abandonment of Banking Secrecy for Foreign Customers

The story that led to the abandonment of banking secrecy for foreign customers is also instructive. Bank secrecy was effectively buried in 2009 with the delivery of UBS account data to the US (which later indirectly led to the collapse of Wegelin Bank), but the foundations had already been eroded in previous years, particularly by concessions to the US and the instrumentalization of the OECD as the «guardian of fair tax competition».

Can Switzerland draw lessons from these two traumatic episodes - at least for its financial center - in determining the right course of action in the current conflict? That would be a very high standard to meet, but perhaps they can contribute to a gain in self-awareness and a more realistic assessment of the situation and the options for action. Here are a few thoughts on this.

• In the controvery over dormant assets and the battle over banking secrecy, the attackers made strong moral arguments, some of which fell on very fertile ground among the Swiss public. Today, the situation is different: in Switzerland, there are few supporters of the US president's blunt customs policy - a stance that, at least, cannot be accused of moralizing.
• This is less obvious than it seems. The view of economic activity as a zero-sum game - «what one person gains, another loses» - which underpins Trump'a tariff policy, is also popular in Switzerland. According to a survey by SRG,  recently cited by «Weltwoche», about the one-third of Swiss people share this logic.
• Even if it may sound simplistic, ultimately such foreign policy disputes are usually about money. Switzerland must prepare itself for this pressure to increase further at a time when highly indebted foreign countries are facing ever greater financing needs for infrastructure, defense, and industrial policy.
• Instead of complaining about this, Switzerland should take advantage of this situation and its financial strength - also in relation to Europe. Why put together a voluminous package of agreements with the EU that effectively commits our country to adopting EU law in areas that are sensitive in terms of domestic policy? Wouldn't Swiss interests be better served by corresponding payments that did not have to be dressed up as «cohesion payments», as is the case today?
• However, when it comes to both the US and the EU, money alone is not the key. Switzerland must develop credible «accompanying measures» as a threat in order to keep the price in francs at a tolerable level, in line with its state-supporting principles.
• For the US, this could mean the SNB selling Treasuries - even Trump has noted the impact of falling government bond prices and the resulting rise in financing costs. In the EU, it could mean introducing border controls, as several member states already have, or suspending the free movement agreement on the grounds that rising population density threatens national cohesion. Switzerland must relearn that it does not need to be popular with everyone at all times.
• For banks, the crisis offers a chance to position themselves as part of the solution, as they did during the coronavirus pandemic, and to burnish the industry's public image. In particular, corporate lenders could show leniency in the coming months toward export-oriented small and medium-sized enterprises hit by Trump's tariffs - in the national interest.