87-596: Migros Bank is a Swiss bank founded in 1958 by Gottlieb Duttweiler and belongs to the Federation of Migros Cooperatives . It has 67 branches in Switzerland (20 new between 2008 and 2016). In 2015, it has a balance sheet of 42 billion Swiss francs and an income of 226 million. In April 2020, Migros Bank agreed to pay German justice authorities around 2.4 million euros to settle allegations that it allowed German clients to evade taxes. In 2022, Migros Bank's Chairman of
174-537: A joint-stock company acting under the administration and supervision of the Confederation. It had eight branches and twenty sub-branches within cantons . The governing board had overall executive management of the National Bank, with supervision entrusted to its shareholders, the banks' council, the banks' committee, its local committees and auditing committee. The three members of the governing board together decided
261-438: A 2005 net income of CHF810 million. Swiss National Bank The Swiss National Bank ( SNB ; German : Schweizerische Nationalbank ; French : Banque nationale suisse ; Italian : Banca nazionale svizzera ; Romansh : Banca naziunala svizra ) is the central bank of Switzerland , responsible for the nation's monetary policy and the sole issuer of Swiss franc banknotes . The primary goal of its mandate
348-648: A banking system after the collapse of Credit Suisse , acquired by the Swiss competitor UBS , and the way the affair was handled by the Swiss National Bank . Switzerland is a prosperous nation with a per capita gross domestic product higher than that of most Western European nations. The value of the Swiss franc (CHF) has been relatively stable compared with that of many others. Swiss neutrality and national sovereignty , long recognized by foreign nations, have fostered
435-508: A dominant role in the Swiss economy and society. According to the Organization for Economic Cooperation and Development (OECD), total banking assets amount to 467% of total gross domestic product. Banking in Switzerland has been portrayed , with varying degrees of accuracy, in overall popular culture and television shows. In 2023 Switzerland lost much credibility as a banking centre after
522-532: A financial crime to the client's account. The disclosed information can only be used for tax auditing and Swiss authorities may prevent disclosure. In December 2017, the Swiss parliament launched a standing initiative and expressed an interest in formally embedding banking secrecy within the Swiss Constitution , making it a federally-protected constitutional right . In January 2018, a U.S. district court ruled that Swiss bankers "[have] nothing to do with
609-399: A loan of CHF 50 billion from SNB after the bank's share price dropped nearly 25 percent after Saudi National Bank , its largest investor, said it could not provide more financial assistance due to its regulatory restrictions. Despite the intervention, a bank run occurred that week, causing SNB and the Swiss government to fast-track UBS taking over Credit Suisse. To support
696-414: A major extent by only four people, namely: Christoph Meili (1997), Bradley Birkenfeld (2007), Rudolf Elmer (2011) and Hervé Falciani (2014). The Swiss Bankers Association (SBA) estimated in 2018 that Swiss banks held US$ 6.5 trillion in assets or 25% of all global cross-border assets. Switzerland's main lingual hubs, Geneva (for French), Lugano (for Italian), and Zürich (for German) service
783-548: A natural environment in which to excavate underground vaults for storage of gold and diamonds. In the 1910s, during World War I , Swiss bankers traveled to France to advertise the country's banking secrecy. The war's contribution to political and economic instability sparked a rapid capital movement into Switzerland. As European countries began to increase taxes to finance the war , wealthy clients moved their holdings into Swiss accounts to avoid taxation. The French banked in Geneva,
870-503: A particular financial institution or country. Furthermore, lawyers in Switzerland can refuse to disclose almost anything to the authorities about their clients. Under the Swiss Anti-Money Laundering Act, banks must report suspicious clients and transactions to the authorities. Lawyers and other advisors have no such obligation if they simply create trusts and other constructs rather than handle assets. According to
957-705: A public law institution that supervises most banking-related activities as well as securities markets and investment funds . Regulatory authority is derived from the Swiss Financial Market Supervision Act (FINMASA) and Article 98 of the Swiss Federal Constitution. The office of the Swiss Banking Ombudsman , founded in 1993, is sponsored by the Swiss Banking Ombudsman Foundation, which was established by
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#17328723865771044-494: A series of proposed financial regulations seeking to limit bank secrecy, but with little resulting action. Despite various international efforts to roll back banking secrecy laws in the country which were largely minimized or reverted by Swiss social and political forces, in 2017 Switzerland agreed to "automatic exchange of information" (AEOI) with foreign governments and their revenue services regarding information of depositors not resident in Switzerland. This constituted de facto
1131-538: A special-purpose vehicle called the SNB StabFund, to park the securities. Within a few years, SNB was able to free itself from UBS's illiquid securities, making a CHF 5 billion profit in the process. The SNB announced on 6 September 2011 to set a minimum exchange rate of CHF 1.20 per euro and that it would "enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities" in order to take measures to stem
1218-562: A stable environment for the banking sector to develop and thrive. Switzerland maintained neutrality through both World Wars , is not a member of the European Union or NATO , and did not join the United Nations until 2002. The Bank of International Settlements (BIS), an organization that facilitates cooperation among the world's central banks , is headquartered in Basel . Founded in 1930,
1305-570: A weak pound sterling in 1964, Swiss bankers began using the title as proof of their financial skill and adherence to secrecy. Throughout the 1980s and 1990s, numerous international proposals for bank secrecy rollbacks were made by foreign states with little success. After the 2008 financial crisis , Switzerland signed the European Union Savings Directive (EUSD) which obliges Swiss banks to report to 43 European countries non-identifying annual tax statistics. On December 3, 2008,
1392-625: Is Switzerland's largest bank. It maintains seven main offices around the world (four in the United States and one each in London, Tokyo, and Hong Kong) and branches on five continents. UBS has been at the center of various tax evasion investigations and other criminal investigations since its founding. UBS was fined $ 100 million by the Federal Reserve in 2004 for trading in dollars with Iran and other sanctioned countries. Credit Suisse Group
1479-805: Is anything the Swiss take more seriously than the precision of their watches or the quality of their chocolate , it's the secrecy of their banks. Steve Kroft , host of Banking: A Crack In the Swiss Vault In November 2013, the Zürcher Kantonalbank was classified as a systemically important bank in Switzerland by order of the Swiss National Bank (SNB), alongside UBS , Credit Suisse , Raiffeisen (Switzerland) and PostFinance , and must meet stricter capital requirements and prepare contingency plans for times of crisis. In another step toward loosening banking secrecy, Switzerland signed
1566-586: Is based on inflation forecasts rather than current inflation. The SNB's monetary policy strategy consists of three elements: a definition of price stability (the SNB equates price stability with a rise in the national consumer price index of less than 2% per year), a medium-term conditional inflation forecast, and, at operational level, a target range for a reference interest rate, which is the Libor for three-month investments in Swiss francs. The general meeting of shareholders
1653-463: Is controversy over the role of the Swiss National Bank in the transfer of Nazi gold during World War II. The SNB was the largest gold distribution centre in continental Europe before the war. A study by the U.S. Department of State in 1997 notes that the bank "must have known that some portion of the gold it was receiving from the Reichsbank was looted from occupied countries". This was confirmed by
1740-523: Is demanding that lawyers, financial advisors plus real estate and art transactions be subject to the same exacting anti-money laundering measures as banks. The "enabling industry" refers to lawyers, fiduciaries, notaries, and real estate agents who assist criminals in investing or hiding their ill-gotten wealth. Their activity is not covered by the Swiss Anti-Money Laundering Act as long as they are only advising clients to place money in
1827-566: Is held once a year, usually in April. Owing to the SNB's public mandate, the powers of the shareholders' meeting are not as extensive as in joint-stock companies under private law. The Bank Council oversees and controls the conduct of business by the Swiss National Bank and consists of 11 members. Six members, including the President and Vice President, are appointed by the Federal Council, and five by
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#17328723865771914-437: Is shown nine papers, a list of eight economic studies which relate to the tasks of the bank, listed from 2005, in addition to a bi-annually published update of research, listed from 2012 to the present. The National Bank is entrusted with the note-issuing privilege. It supplies the economy with banknotes. It is also charged by the Confederation with the task of coin distribution. In the field of cashless payment transactions,
2001-916: Is solely the role of the Federal Banking Commission. Raiffeisen Banks "assumes the role of central bank" in providing treasury services, and is the third largest group consisting of 328 banks in 2011, 390 in 2012 with 1,155 branches. According to the bank in 2012 non-U.S. businesses of Wegelin & Co , the oldest Swiss bank, would be bought by the Raiffeisen group. The group has 3 million plus clients within Switzerland. Capital ownership of UBS by country of origin as of 2014 UBS Group AG came into existence in June 1998, when Union Bank of Switzerland , founded in 1862, and Swiss Bank Corporation , founded in 1872, merged . Headquartered in Zürich and Basel , it
2088-610: Is therefore obliged by constitutional statute law to act in accordance with the economic interests of Switzerland. Accordingly, the prime function of the Nationalbank is: to pursue a reliable monetary policy for the benefit of the Swiss economy and the Swiss people. The National Bank publishes within its own site a list of research done as work in progress by staff members, which begin at 2004 (2 papers), to 2005 (2), 2006 (11), 2007 (17), 2008 (19), 2009 (16), 2010 (19), 2011 (14), 2012 (16), 2013 (11), 2014 (13), and to 1 August 2015 there
2175-528: Is to ensure price stability, while taking economic developments into consideration. The SNB is an Aktiengesellschaft under special regulations and has two head offices, one in Bern and the other in Zürich . The bank formed as a result of the need for a reduction in the number of commercial banks issuing banknotes, which numbered 53 sometime after 1826. In the 1874 revision of the Federal Constitution it
2262-612: The Axis powers by storing gold and cash balances in underground vaults, buying gold from the Nazi German state, and lending to both Germany and Italy, thus supporting their aggressive endeavors. Adolf Hitler maintained an account at the Union Bank of Switzerland (UBS) estimated at 1.1 billion ℛ︁ℳ︁ . After the United States formally asked the bank to transfer the money in
2349-608: The Congress of Vienna formally established Switzerland's international neutrality , which led to a large capital influx. The wealthy, landlocked Switzerland saw banking secrecy as a way to build an empire similar to that of France , Spain , and the United Kingdom . Swiss historian Sébastian Guex notes in The Origins of Secret Swiss Bank Accounts : This is what the Swiss bourgeoisie are thinking: "That's our future. We will play on
2436-490: The European Union , United States, and United Kingdom . As of 2018 , there are more than 400 securities dealers and banking institutions in Switzerland , ranging from the "Two Big Banks" down to small banks serving the needs of a single community or a few special clients. The largest and second largest Swiss banks are UBS Group AG and Credit Suisse Group AG , respectively. They account for over 50% of all deposits in Switzerland; each has extensive branch networks throughout
2523-523: The Federal Assembly increased the prison sentence for violations of banking secrecy from a maximum of six months to five years. In late 2008, after an international, multi-state investigation into Switzerland's role in U.S. tax evasion, UBS entered into a limited, deferred prosecution agreement (DPA) with the U.S. Department of Justice . The agreement initiated the landmark Birkenfeld Disclosure of information on more than 4,000 clients. If there
2610-607: The Federal Supreme Court ; and a 1932 campaign against tax evasion in France led by Édouard Herriot 's government. Alleged wealthy French tax evaders included military generals and Catholic bishops . An additional provision , Article 47(b), was drafted before its ratification to protect Jewish assets from the Nazi party. During World War II , Switzerland remained diplomatically neutral but its economy and financial system served
2697-667: The IRS as "offshore financial institutions". The IRS issues the entities unique Global Intermediary Identification Numbers, or GIINs, which relieve the banks of FATCA 's requirement to investigate whether they're held by Americans. This loophole was allegedly used by billionaire Robert Brockman to avoid taxation . The banking systems of Switzerland and Liechtenstein have close ties. Liechtenstein's trust companies are clients of Swiss banks. Liechtenstein does not require trust companies to identify people with signatory powers, and does not prosecute tax evasion or tax fraud (2000). To improve
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2784-474: The Paris Climate Agreement (article 2) and are responsible for at least 50 million tons of carbon dioxide emissions in 2017. The Swiss National Bank pursues a monetary policy serving the interests of the country as a whole. It must ensure price stability, while taking due account of economic developments. Monetary policy affects production and prices with a considerable time lag. Consequently, it
2871-554: The Reichsbank . Of this, a value of approximately 780 million CHF of the gold given to the National Bank was gold which had been looted by the forces of Germany. In addition the National Bank also exchanged between 1.2 and 1.6 billion CHF for gold from the Allied forces . During 20 April 1944, gold from the gold reserves of Italy arrived from Como at the railway station within Chiasso . There
2958-554: The Swiss Bankers Association . The ombudsman's services, which are offered free of charge, include mediation and assistance to persons searching for dormant assets. The ombudsman handles about 1,500 complaints raised against banks yearly. Generally speaking, lawyers will not work against the banks and regulators are "too weak" to act in case of a problem, according to the Financial Times of London. In February 2013,
3045-839: The Swiss Federal Council allowed the signing of the Foreign Account Tax Compliance Act (FATCA) with the US. These agreements force all Swiss banks to inform the Internal Revenue Service of undeclared, offshore accounts. These new regulations are applicable from 2014, and in turn assure Swiss banks of continued operations within the US. In July 2019, the US Senate approved the Double Taxation Treaty (DTA) with Switzerland, which had already been accepted by
3132-469: The acquisition of Credit Suisse by UBS , the SNB offered liquidity assistance of up to CHF 100 billion. The basic governing principles of the Nationalbank are contained within Article 99 of the Federal Constitution, which deals with matters of monetary policy. There are three numbered factors concerning principles explicitly mentioning the Nationalbank, of four altogether shown within the Article. The SNB
3219-416: The stock market . In 2018, its share portfolio stood at 153 billion Swiss francs. According to its guidelines, it "avoids shares in companies which produce internationally banned weapons, seriously violate fundamental human rights or systematically cause severe environmental damage". Since 2016, environmental associations and academics criticize the fact that these investments do not take into account
3306-545: The 1990s, UBS wired US$ 400 to 700 million worth of Reichsmarks to U.S. authorities. Banking regulations in Switzerland limit the amount of orphaned assets allowed to leave a bank's custody. UBS, with consent from the Swiss government , froze the account containing Hitler's assets indefinitely, and clipped the Reichsmarks, stripping the currency of value. During World War II , UBS also maintained accounts for hundreds of German Jewish businesspeople and households. After
3393-744: The BIS chose to locate in Switzerland because of the country's neutrality , which was important to the organization founded by countries that had been enemies in World War I. Banking has played a dominant role in the Swiss economy for two centuries. According to the Organization for Economic Co-operation and Development (OECD), total banking assets amount to 467% of total gross domestic product. Swiss banks managed $ 2.4 trillion (CHF2.1 trillion) of assets belonging to wealthy foreigners in 2022, more than any other country and before Hong Kong ($ 2.2T) or Singapore ($ 1.5T) who are ranked 2nd and 3rd respectively, according to
3480-632: The Banking Law of 1934 was passed, the bank aggressively protected assets of the " enemies of Nazi Germany ". When Hitler announced an (aborted) invasion of Switzerland in 1940, UBS contracted the Swiss Armed Forces to blockade their retail banks and transport Jewish assets to underground military bunkers. The Swiss Bank Corporation (SBC) and Credit Suisse , did likewise. After the end of World War II , Switzerland and its financial system benefited greatly from having remained unharmed while all
3567-448: The IRS, Swiss law prohibits the disclosure. If a client does consent, Swiss banks send the IRS tax-related information about the account holder but are prohibited from disclosing identities pursuant to Article 47 of the Banking Law of 1934. The 2018 Financial Secrecy Index stated: "this [does] not mean that Swiss banking secrecy was finished, as some excitable news reports suggest... the breach
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3654-675: The Italians in Lugano , and the Germans in Zürich . The Federal Act on Banks and Savings Banks , colloquially known as the Banking Law of 1934, made the violation of banking secrecy a federal criminal offence. That major step beyond the prior enforcement of banking secrecy under civil law resulted from several developments of the early 1930s, including the introduction in the same legislation of an embryonic form of banking supervision, which Swiss bankers argued could endanger secrecy; evolving jurisprudence of
3741-494: The Money Laundering Reporting Office Switzerland in 2017, official " suspicious activity reports " reached nearly 4,700 (worth $ 16.2 billion) up from 2,909 reported cases in 2016. The Swiss Financial Services Act of 2020 (FinSA) requires financial advisers to obtain a licence (950 firms advising on nearly $ 200 billion have been approved by FINMA ). The law also requires any "retrocession" paid by
3828-488: The National Bank provides services for payments between banks. These are settled in the Swiss Interbank Clearing (SIC) system via sight deposit accounts held with the National Bank. The National Bank manages currency reserves . These engender confidence in the Swiss franc, help to prevent and overcome crises and may be utilized for interventions in the foreign exchange market . The National Bank contributes to
3915-457: The SNB reported a loss of 132 billion CHF in its annual results for 2022. As many cantons expected dividend payments from the SNB, some cantons had to revise their budgets or even tap their financial reserves. For example, a planned tax decrease in the canton of Thurgau had to be postponed. Likewise, the federal government had budgeted a 666 million CHF income from SNB. On 16 March 2023, Credit Suisse sought to shore up their finances by taking
4002-402: The SNB took without knowing these facts at the time, nor inquiring to any great degree in the process of its transfer into the possession of the SNB, according to Robert Vogler, a former archivist of the SNB. In 1981 the bank participated in research involving Orell Füssli and an optical research group named Landis+Gyr , on matters of banknote design. During 1994 the bank was described as
4089-499: The SNB treats the location of the gold reserves as a secret. Independent confirmation of the gold's location was obtained by the Bernese newspaper Der Bund in 2008. It published a photograph of the bullion that a Keystone news agency photographer was allowed to take at the SNB premises in Bern in 2001. Der Bund also quoted a retired official of the city's surveying office as saying that
4176-556: The Shareholders' Meeting. The Bank Council sets up four committees from its own ranks: an Audit Committee, a Risk Committee, a Remuneration Committee and an Appointment Committee. A list of the Bank Council members is published on the SNB website. The Swiss National Bank's management and executive body is the governing board. The governing board is responsible in particular for monetary policy, asset management strategy, contributing to
4263-473: The Swiss Bergier commission in 1998 which concluded that the SNB received US$ 440 million in gold from Nazi sources, of which US$ 316 million is estimated to have been looted. The gold from Nazi governorship sources was in the form of lingots containing gold looted from central banks of Europe and gold from Jews executed within the concentration camps established by the machination of the Nazi regime, which
4350-531: The Swiss Confederation. It processes payments on behalf of the Confederation, issues money market debt register claims and bonds, handles the safekeeping of securities and carries out money market and foreign exchange transactions. The National Bank compiles statistical data on banks and financial markets, the balance of payments, the international investment position and the Swiss financial accounts. The Swiss National Bank invests its assets, particularly in
4437-441: The Swiss authorities. Swiss banks are obliged to reject or terminate business relationships if there are doubts about the real identity of the owner of the account. Swiss banks have a legal obligation to record the ultimate beneficial owners of all assets they handle worldwide, but doing so accurately can be tricky in jurisdictions where it is easy for third parties to mask who the owners are . Thus, loopholes exist through
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#17328723865774524-436: The Swiss parliament in 2010. The new agreement, applicable to accounts from September 23, 1999, onward, amends the tax treaty of 1996 and regulates requests for information on financial accounts by US authorities, as well as exemptions for retirement savings by US persons. Starting in 2019, Switzerland began to share (with the country of origin or residence) the details of 3.1 million bank accounts held by foreigners, as part of
4611-432: The U.S. Foreign Account Tax Compliance Act (FATCA), after rejecting it twice in parliament. The FATCA requires Swiss banks to disclose non-identifying U.S. client information annually to the Internal Revenue Service . The agreement does not guarantee the semi-automatic information transfers, which remain at the discretion of Swiss government authorities. If a client does not consent to having their information shared with
4698-465: The agreed automatic exchange of information. Swiss banks, insurance companies and trusts have a legal obligation to comply but charitable Swiss foundations are so far exempt. As of 2019, Switzerland received financial data from 75 countries and shared data with 63 (over 100 countries starting in 2023) representing 3.6 million accounts as of 2023. Around 9000 banks, insurers, trusts and other financial institutions in Switzerland provide this information to
4785-433: The bank to the advisor to be disclosed publicly. Under current rules, banking institutions and cantonal authorities can only report what is in their registers; looking into the origins of assets or connections between individuals is not permitted. For example, in 2022, a Russian oligarch reportedly handed his Swiss company over to his wife to avoid the sanctions against Russia . Swiss authorities can freeze assets if
4872-498: The bank was instructed to release notes of small denomination, for the first time, by the Federal Council of Switzerland. The Federal Council devalued the Swiss Franc during 1936, and as a result there was made available to the National Bank an amount of money, which the bank subsequently stored in a Währungsausgleichsfonds reserve for use in future situations of emergency. The Swiss National Bank provided 1.2 billion CHF to
4959-462: The board of directors, Fabrice Zumbrunnen, announced that he would be stepping down from his position. Banking in Switzerland Banking in Switzerland dates to the early 18th century through Switzerland 's merchant trade and over the centuries has grown into a complex and regulated international industry. Banking is seen as emblematic of Switzerland and the country has been one of
5046-471: The cantonal banks account for about 30% of the banking sector in Switzerland, with a network of over 800 branches and 16 000 employees in Switzerland. In 2014 consolidated total assets of all cantonal banks accounted around 500 bln CHF, which is comparable with those of one the "Big Banks", UBS and Credit Suisse. The largest cantonal bank, the Zurich Cantonal Bank , has approximately 5 000 employees had
5133-503: The center of various tax evasion investigations or money laundering activities since its founding. Credit Suisse collapsed in 2023 and it was acquired by UBS the same year . The term private bank refers to a bank that offers private banking services and in its legal form is a partnership. The first private banks were created in St. Gallen in the mid-18th century and in Geneva in the late 18th century as partnerships, and some are still in
5220-563: The choice that an American taxpayer makes to not declare offshore assets", later clarifying they should not be seen as facilitating tax evasion but rather provide a legal service that is made illegal by the client. The Swiss Justice Ministry announced in March 2018 that disclosure of client information in a pending court case involving a Swiss bank is subject to federal espionage and extortion charges in addition to charges relating to banking secrecy laws. In 2023, Switzerland lost credibility as
5307-618: The collapse of Credit Suisse , one of the largest Swiss banks, subsequently acquired by its Swiss competitor UBS , and due to the inept way the affair was handled by the Swiss National Bank . Bank secrecy in the Swiss region can be traced to the Great Council of Geneva , which outlawed the disclosure of information about the European upper class in 1713. During the 1780s, Swiss bank accounts began insuring deposits , which contributed to their reputation for financial security . In 1815,
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#17328723865775394-539: The contradictions between the European powers and, protected by the shield of our neutrality, our arm will be industry and finance." After a small scale civil war in the 1840s between the Swiss cantons , the Swiss Federation was founded in 1848. The formation of the state, through a direct democracy , contributed to the political stability needed for banking secrecy. The mountainous terrain of Switzerland provided
5481-416: The countries of origin to whom it properly belongs. Breaches of banking secrecy laws in Switzerland are automatically processed pursuant to Article 47 of the Banking Law of 1934 : those who disclose client information are subject to a maximum of five years' imprisonment and 250,000 francs ( € 215,000 or US$ 250,000) in fines. Whistleblowers and leakers of client information often face hostility from
5568-589: The country and most international centers. Due to their size and complexity, UBS and Credit Suisse are subject to an extra degree of supervision from the Federal Banking Commission . As of 2023 only one in five Swiss people banks with either UBS or Credit Suisse, but most Swiss prefer one or the other. Credit Suisse was historically the bank of Protestant Zürich; UBS originated in Catholic Basel, near France. The Swiss National Bank (SNB) serves as
5655-476: The country's central bank . Founded by the Federal Act on the Swiss National Bank (16 January 1906), it began conducting business on 20 June 1907. Its shares are publicly traded, and are held by the cantons , cantonal banks, and individual investors; the federal government does not hold any shares. Although a central bank often has regulatory authority over the country's banking system, the SNB does not; regulation
5742-568: The development of a possible recession. The bank stated the 1.20 exchange rate was defendable as the bank could potentially proceed to mint enough banknotes to control the rate sufficiently. The SNB announced on 15 January 2015 the euro currency arrangement would end as the euro crisis had passed and the Europeans would be making financial policy changes. As of 31 December 2021 78,17% of voting shares are held by public shareholders ( cantons , cantonal banks , etc.). The remaining shares are largely in
5829-566: The different geographical markets. It currently ranks number two behind the United States and on par with Singapore in the Financial Secrecy Index . The banks are regulated by the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB) which derives its authority from a series of federal statutes. Banking in Switzerland has historically played, and still continues to play,
5916-457: The end of Swiss banking secrecy for depositors who were not Swiss residents. Furthermore, after Switzerland ratified the Foreign Account Tax Compliance Act agreement with the U.S.A., because of concerns regarding their tax liability (the U.S. taxes its citizens regardless of whether they are resident in the USA or not) some Swiss banks have gone so far as to close accounts held by US citizens, and to ban
6003-697: The gold vaults take up an area of roughly half the Federal Square and have a depth of dozens of meters, down to the level of the Aar river. The SNB says that the gold reserves are stored in different safe places in Switzerland (70% -mostly under the Bundesplatz in Berne and at the Bank for International Settlements in Basel) and abroad (i.e. Bank of England and Bank of Canada ). From
6090-431: The hands of private persons. Shares of the SNB have been listed at the SIX Swiss Exchange since 1907. As of April 2022, Theo Siegert , a German entrepreneur, holds 5.05% of its stocks, and as such, he is the third-largest shareholder, between the Canton of Vaud (3.401%) and the Canton of Zürich (5.2%). The national bank's statutes, though, limit the voting rights of private investors to 100 shares. On 9 January 2023
6177-688: The hands of the original families such as Hottinger and Mirabaud . In Switzerland, such private banks are called "private bankers" (in the local languages, a protected term) to distinguish them from the other private banks which are typically shared corporations. Historically in Switzerland a minimum of CHF1 million was required to open an account, however, over the last years many private banks have lowered their entry hurdles to CHF250,000 for private investors. There are, as of 2006, 24 cantonal banks ; these banks are state-guaranteed semi-governmental organizations controlled by one of Switzerland's 26 cantons that engage in all banking businesses. Together
6264-762: The largest offshore financial centers and tax havens in the world since the mid-20th century, with a long history of banking secrecy and client confidentiality reaching back to the early 1700s. Starting as a way to protect wealthy European banking interests, Swiss banking secrecy was codified in 1934 with the passage of a landmark federal law, the Federal Act on Banks and Savings Banks . These laws were used to protect assets of persons being persecuted by Nazi authorities but have also been used by people and institutions seeking to illegally evade taxes , hide assets, or to commit other financial crime . Controversial protection of foreign accounts and assets during World War II sparked
6351-554: The latter years of the 1990s until sometime during 2005, the National Bank transferred from its possession (when the gold price was at its historic low) half of its gold reserves, following the Nazi gold affair . The Study Center Gerzensee, located in Gerzensee , is a foundation established by the SNB and run as an autonomous organization. The SNB in 1980 acquired the New Castle of Gerzensee,
6438-399: The law requires them to. However, seizing assets is only permitted in cases involving crime or for destituted potentates . At least a dozen destitute autocrats have had their assets frozen or seized by the Swiss government over the years. The amounts can be counted in billions of dollars. According to the Swiss media , some of the amounts have not yet been restituted to the people of
6525-595: The monetary policy of the Swiss National Bank. Towards the end of 1993 it had 566 employees. With the inception of Article 99 of the Swiss Federal Constitution , in May 2004, the National Bank achieved formal independence. SNB and the Swiss government engineered a bailout plan for UBS in October 2008 during the subprime mortgage crisis . SNB, agreeing to take over around $ 60 billion of UBS's toxic assets, created
6612-606: The neighbouring economies were devastated, but had to face the reputational damage from its support to the Axis powers, which also led to threats to banking secrecy as the Allied victors sought to expropriate Nazi assets held under Swiss custody. By and large, the Swiss banking sector was able to successfully deflect the threat to its secrecy practices, not least as it supported France and the United Kingdom with significant lending. When British politician George Brown blamed " gnomes of Zurich " for
6699-552: The opening of new accounts by US citizens and by dual US-Swiss citizens, including those deemed lawful permanent Swiss residents. Thus banking secrecy remains in force only for those residing in and solely taxable in Switzerland. Disclosing client information has been considered by Switzerland a criminal offence since the early 1900s. Employees working in Switzerland and at Swiss banks abroad have "long adhered to an unwritten code similar to that observed by doctors or priests ". Since 1934 Swiss banking secrecy laws have been violated to
6786-522: The public and sustain professional setbacks. Denounced as a criminal in Switzerland, a federal arrest warrant has been in place for Bradley Birkenfeld since 2008, after he disclosed UBS client information to the U.S. Internal Revenue Service in 2007. After the 2008 financial crisis , the Swiss Parliament initiated a series of international tax treaties that rolled back banking secrecy protections for foreign clients in response to pressure from
6873-670: The sole purpose of tax auditing . This agreement includes the Common Reporting Standard (CRS) which obliges Swiss banks to automatically send foreign tax authorities the client's name, address, domicile , tax number, date of birth, account number, account balance at years end, and the gross investment income . The CRS does not, however, override the Swiss Banking Law of 1934, so the client's expenses (withdrawals) and investments are not disclosed. Thus tax authorities cannot "go fishing" for tax evaders, they must directly link
6960-427: The stability of the financial system and international monetary cooperation. The Governing Board consists of three members: The SNB manages the official gold reserves of Switzerland, which as of 2008 amount to 1,145 tonnes and are valued at 30.5 billion CHF . The gold is believed to be stored in huge vaults beneath the Federal Square ( Bundesplatz ) to the north of the federal parliament building in Bern , but
7047-506: The stability of the financial system by acting as an arbiter over monetary policy. Within the context of this task, it analyses sources of risk to the financial system, oversees systemically important payment and securities settlement systems and helps to promote an operational environment for the financial sector. Together with the federal authorities, the National Bank participates in international monetary cooperation and provides technical assistance. The Swiss National Bank acts as banker to
7134-515: The study conducted by the Boston Consulting Group . Most of the wealth from overseas in Switzerland originates in Germany , France and Saudi Arabia (2018). According to the Swiss Bankers Association in 2022, the amount held by Russian clients in Swiss banks is between CHF 150 and CHF200 billion ($ 160 and $ 214 billion). The Swiss Financial Market Supervisory Authority (FINMA) is
7221-511: The tracking down and freezing of assets, Swiss NGO Public Eye has called for a national task force, a register of the beneficial owners of front companies and a reporting obligation for lawyers. The Tax Justice Network (and FATF ) made similar recommendations in 2018, including breaking up the Big Four accounting firms . As of 2022, the Swiss government is following up on some of those recommendations. In addition, Transparency International
7308-508: The use of shell companies , trust funds , and proxy directors signing the paperwork without owning the assets. Similarly, the use of a " straw man " or a family member is a way also to hide the true beneficial ownership in some cases. Loopholes exist also with people with multiple nationalities who only declare one citizenship to the authorities for the purpose of tax reporting . Another loophole consists (for US citizens) in setting up shell companies abroad and registering them with
7395-608: Was a partial [dent]". In March 2015, the Swiss government entered into bilateral "Rubik Agreements" with Germany, Austria, and the United Kingdom allowing foreign holders of Swiss bank accounts to retain their anonymity in exchange for paying predetermined back taxes . Switzerland adopted the International Convention on the Automatic Exchange of Banking Information ( AEOI ) in 2017, agreeing to automatically release limited financial information to certain countries for
7482-475: Was given the task to oversee laws concerning the issuing of banknotes. In 1891, the Federal Constitution was revised again to entrust the Confederation with sole rights to issue banknotes. The Swiss National Bank was founded under the law of 6 October 1905 ('the National Bank Act'), which entered into force on 16 January 1906. Business was started on 20 June 1907. Sometime during World War I (1914–1917)
7569-612: Was the second-largest Swiss bank. Based in Zürich and founded in 1856, Credit Suisse offers private banking, investment banking and asset management services. It acquired the First Boston Corporation in 1988 and merged with the Winterthur insurance company in 1997; the latter was sold to AXA in 2006. The asset management services were sold to Aberdeen Asset Management during the 2008 financial crisis . Credit Suisse has been at
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