Greetings from the land of antiquated ideas
April 07, 2015

Greetings from the land of antiquated ideas

Tax-related bank-client confidentiality is dead – is this news to you? I would think not. People who get too caught up in old news risk missing out on the here and now, but they also risk having the future pass them by.

It is clear by now everywhere around the world that Swiss banks only accept and manage taxed assets. Even the former German Finance Minister Peer Steinbrück, who was one of the Swiss financial centre’s toughest critics in recent years, recently recognised this, and the banks in Switzerland were happy to hear it. We just learned the same from France. But it would appear that in Abu Dhabi, the news that Swiss banks have transformed only arrived very recently. Ahmed Ali al-Sayegh, Chairman of Abu Dhabi Global Markets, is of the view that the business model of the Swiss banks has served its time. According to al-Sayegh, Abu Dhabi prefers to align itself with Singapore, which has reached “a very transparent deal with the world”. This is a clear indication that al-Sayegh is referring to tax matters, not however, to comprehensive Swiss banking as a whole. The Financial Times, whose last positive treatment of the Swiss financial centre seems like it was eons ago, quickly picked up el-Sayegh’s statement in the title of an article in its online edition on 29 March 2015 (for subscribers only), and in doing so, betrayed itself as a supporter of antiquated stereotypes. The key milestones that resulted in tax transparency for the Swiss financial centre were recently summarised by Thomas Sutter.

Swiss banking: More than just tax-related matters

But does that mean that Swiss banking is no longer competitive and must to admit defeat, surrendering to players such as perhaps Abu Dhabi in future? I don’t think so. The financial centre has preserved its traditional strengths, which is demonstrated by the assets under management, which have been stable for years. Here a few other strengths: Economic and political stability, an efficient infrastructure, an ideal geographic location and multilingualism, but also well-capitalised banks, highly-qualified employees and outstanding standards of quality. The combination of these factors is what make Swiss banking what it is.

Swissness abounds

And shall I let you and Mr. al-Sayegh in on another piece of information? When Singapore “invented” its financial centre, it looked to Switzerland as an example on more than on one occasion. So if Abu Dhabi is now taking Singapore as its model, a lot of Swissness can be found there as well. In addition, the Swiss banks are one of the most important banking groups in Singapore. Perhaps this will also be the case in Abu Dhabi in future. I wish Abu Dhabi all the best in its ascent as a new financial centre. There’s no need dust off any antiquated ideas hidden away on the back shelf though - this would only block the view to the present-day.