Swiss private bankers “must wake up and take action”, as their
world leading position is being jeopardised by the current
difficult market situation, said Nicolas Pictet, chairman of
the Swiss Private Bankers Association (SPBA).
Pictet, a partner at Pictet & Cie, warned his colleagues
about the risk of decline Swiss wealth managers are exposed to, if
initiatives to better and wider the services provided are not taken
shortly.
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“Others are lying in wait and we know that
once a market is lost, it is often for a long time,” said Pictet in
his speech at the 77th SPBA general assembly, in Geneva.
Profits slashed as regulation
increases
According to Pictet the predominance of the
Swiss private banking sector, whose profits slumped 9% in 2011 to a
total of CHF299m ($314m), is threatened due to a conjunction of
factors.
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By GlobalDataThe extremely delicate economic situation and
the strength of the Swiss Franc, in which banks’ cost are
compressed, played a major role in making this the most “turbulent
period” of the last 30 years for Swiss wealth managers.
The increasing cost of complying with the
mounting number of legislative and regulatory changes, imposed on
Swiss private bankers by law or by the signing of international
treaties, added an additional burden to banks’ balance sheets.
The protectionist drift
Nevertheless it is the “undeniably
protectionist trend” taken by US and European governments that is
the main issue, according to the SPBA chairman.
“We find the latest European, as well as
American, legislative initiatives worrying,” he said, pointing the
finger at the Foreign Account Tax Compliance Act (FATCA) and the
European directive on investor protection.
Pictet lashed out against the “governments’
mania of wanting to constantly exchange information.”
“We must bear in mind the fact that for many
clients, discretion regarding their assets is a question of
survival, at least materially, and sometimes existentially. Of
course, no intergovernmental organisation dares say this,” he
said.
The need of change in EU
treaties
Pictet welcomed the tax agreements Switzerland
has signed with several EU countries – Germany, UK and Austria – as
capable of granting market access to those countries.
Yet, according to the SPBA chairman this kind
of agreement imposed “unrealistic timetables” on Swiss banks and
would have a more beneficial effect if signed in an EU context
rather then country by country.
Finally, Pictet launched a plea to Swiss
authorities to allow banks’ a broader diversification of services,
to enhance the country’s infrastructure to attract clients and
qualified staff and to start legislative simplification.
According to Pictet these changes are needed
and vital to keep Swiss private banking at the top.
