As many as 7,000 Swiss private banking jobs could be culled if the EU federal government proposes stiff new regulations aimed at improving market infrastructure and the quality of service provided, according to Financial Times.
The Swiss Bankers Association (SBA) has notified that heavy job cuts are unavoidable if the proposals, which would force Swiss banks to set up branches or subsidiaries in the EU to access onshore clients, are approved.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The proposals form part of the revised Markets in Financial Instruments Directive, which aims at improving investor protection and competition across Europe.
Stefan Hoffmann, head of European affairs at the SBA, said that large private banks will be able to comply with the requirements, but small and medium-sized players lack the financial means to establish an onshore presence.
"Large banks are solving the problem at a high cost by setting up subsidiaries or branches in Europe, but that option is not open to small banks," Hoffmann said.
This move will cut smaller banks off from the estimated CHF1 trillion of assets currently handled by Swiss private banks on behalf of EU-based private clients, reported Financial Times.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe regulation will increase the pressure already applied on the Swiss private banking industry caused by a global shift towards onshore assets and increased tax transparency.
The SBA expects the impact of the regulation on small and medium-sized groups will lead to heavy outflows of assets from private banks and a big shift of jobs from Switzerland to the EU.
The Swiss private banking industry currently represents about CHF5 trillion of assets, while cross-border wealth management accounts for approximately 20,000 jobs, according to figures from the SBA.
