Private banking has come a long way
since 13th century Geneva relaxed usury laws, so spurring the
development of institutions that eventually were to become Swiss
wealth managers. But the development of today’s huge global private
banking industry has – stunningly – been compressed into an
incredibly short period of only 20 years.

For when Private Banker International first appeared back in 1987,
few banks outside Switzerland offered sophisticated private
banking. Most wealthy went to their family stockbroker, accountant
or lawyer for advice. Plain bonds, equities and pensions were
virtually the only investment choices, as articles in this issue to
mark our birthday show.

Now, the wealth business generates at least $500 billion of
revenues annually – giving other parts of the financial industry
such as investment banking a good run for its money in terms of
performance.

Why has private banking taken off so spectacularly? Global economic
growth; the strength of financial markets, albeit with occasional
disruptions such as the dotcom bust; economically liberating
measures such as former UK Prime Minister Margaret Thatcher’s
privatisation programme, copied by so many other nations; and the
fall of Communism in favour of market economics, are just a few of
the factors.

And private banking is being spurred yet again by the rapid
development of personal wealth in the emerging nations, such as
Brazil, Russia, India, China and South Africa.

Private banking, from being a mysterious, rather distrusted
offshore business conducted by the Swiss, has gone onshore, become
increasingly respectable and part of the mainstream financial
services industry in a growing number of countries. Our
congratulations to all the pioneers of the industry over these past
two decades who have contributed to this great success story.

PBI made its debut in 1987, at a time of a fierce market downturn;
we celebrate our 20th anniversary with another crisis – this time
the subprime credit crunch. We can only hope that in 2027, our 40th
anniversary will happily be crisis-free.