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Bank groups
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Variety within the Swiss banking system
Apart from numerous other qualities, the Swiss banking system is noted for its variety.
The Swiss banking system is based on the concept of universal banking, whereby all banks
can offer all banking services. Nevertheless, it has seen the development of different
bank groups that have come to specialize in certain areas.
The Swiss universal bank offers it all
The Swiss banking system is based on the model of universal banking. This means that all
banks can provide all banking services, such as:
- credit/lending business
- asset
management and investment advice
- payment transactions
- deposit
business (savings accounts, etc.)
- securities business (stock
exchange transactions)
- underwriting business (issuing of bonds)
- financial analysis
This
is directly opposite of banking systems in English-speaking countries and in Japan
which separate commercial banking from investment banking. Legislation is, in fact,
currently underway in the United States to liberalize the system.
The advantages of universal banking include the ability to spread risk over a greater
number of banking businesses and customers from all sectors of the economy.
Specialized bank groups
Banking in Switzerland is extremely diverse, even though it is based on the principle of
universal banking. Several bank groups are now fully or partially specialized:
The "big" banks
The two "big" banks - UBS AG and the Credit Suisse Group - together account for
over 50% of the balance sheet total of all banks in Switzerland. UBS AG is the world's
leader in wealth management and also Switzerland's leading bank for individual and
corporate clients. It is also an important global player in investment banking and the
securities business. Credit
Suisse is a leading global bank headquartered in Zurich. Credit Suisse is renowned for providing expert
advice, holistic solutions and innovative products to a wide range of corporate and institutional clients
and high-net-worth individuals globally, as well as retail clients in Switzerland.
Cantonal banks
Formerly one to two per canton, there are today a total of 24 Cantonal banks (in
Switzerland's 26 cantons and half-cantons); Cantonal banks are
semi-governmental organizations with a state guarantee. Liberalization is currently
underway with respect to the state guarantee. Despite their close connection to the state,
cantonal banks must comply with commercial principles in their business activities. Their
objective, according to cantonal law, is to promote the canton's economy. Field of
activity: engaged in all banking businesses; emphasis on lending/deposit business.
Regional banks and savings banks
Smaller universal banks with an emphasis on lending/deposit business. These banks
voluntarily restrict their activities to one region. Advantage: customer proximity -- they
are acquainted with local circumstances and with regional business cycles.
Raiffeisen Group
As a group of banks with the largest branch network in Switzerland, the Raiffeisen banks together form
Raiffeisen Switzerland, which is responsible for the entire Raiffeisen Group strategy and for group-wide
risk management. It also coordinates the group’s activities, creates the conditions for the business
activities of the local Raiffeisen banks and advises and supports them in all issues. The bank group,
which is structured as a cooperative, is one of Switzerland’s leading retail banks. In recent years,
Raiffeisen has positioned and established itself as the third largest bank group in Switzerland. Raiffeisen
meanwhile counts 3 million Swiss citizens among its customers. Of these, some 1.4 million are members
of the cooperative and hence co-owners of their Raiffeisen bank. They value the decisive benefits of
Raiffeisen: Proximity to the customer, support, reliability and the exclusive benefits for members of
the cooperative.
Private banks
Among the oldest banks in Switzerland. Legal form: individually owned firms, collective
and limited partnerships. Private bankers are subject to unlimited subsidiary liability
with their personal assets. Field of activity: asset management, chiefly for private
clients; as a rule, private banks do not publicly offer to accept savings deposits.
Foreign banks
Foreign-control means that over half of the company's votes are held by foreigners with
qualified interests. Origin of banks: Europe, predominantly EU (over 50%), Japan (around
20%). Fields of activity: foreign business (share of foreign assets in the balance sheet
total is 70%), asset management.
Other banks
This bank group includes banks with various business objectives, such as: institutes
specializing in the stock exchange, securities and asset management businesses; commercial
banks: as a rule, these are universal banks for which mortgage investments play a
significant role, in addition to commercial loans to trade, industry and commerce; and
consumer credit institutes: institutes specializing in small loans (to private individuals
and the industry).
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