What is Swiss Banking?

Published by Thomas Herold in Banking, Investments

'Swiss Banking' is explained in detail and with examples in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

Swiss Banking is unusually concentrated into two main banks. These are UBS and Credit Suisse. Together they control an enormous amount of the accounts and assets in all of Switzerland.

The Swiss Banking tradition used to be shrouded in secrecy. Under the administration of American President Obama, many Swiss banks were investigated and charged with helping Americans to illegally evade taxes. This is not a crime in Switzerland, and the country’s laws had long protected their banks for engaging in the activity.

Starting with justice probes that investigated around a dozen of these Swiss banking outfits, the U.S. began handing out sentences and fines in 2013. Two banks at least were destroyed by the legal wrangling with the United States’ justice department. These included Wegelin & Company and Bank Frey.

Wegelin & Company proved to be the oldest existing Swiss bank when the fines came out. It was the first foreign or Swiss bank to receive a criminal sentence and penalty for helping Americans to avoid taxes. The U.S. Justice Department levied $74 million in fines and forfeitures against the bank. The bank was already being wound down by the Swiss authorities because it had suffered so much financially from the struggle with the American government.

Bank Frey & Co was a boutique lender in the Swiss banking tradition. Its principal office was on the most important banking street in Zurich. In October of 2013 it had to close its doors as well in large part because of the lengthy and costly tax dispute with the U.S.

The main players in Swiss banking today UBS and Credit Suisse operate under similar models as universal Swiss banks with important overseas operations. UBS as the larger of the two has a greater number of banking assets. It is headquartered in Zurich and Basel and boasts operations in over fifty countries. It maintains more than 60,000 employees around the globe. It has offices in every major financial center of the world. About a third of the bank employees work in the Americas division. Slightly more than another third call Switzerland their base of operations.

In just over 150 years of history, UBS has managed to expand and acquire more than 300 different banks. They have over 300 branches and more than 4,500 employees in Switzerland alone. Over a third of all Swiss homes and 120,000 Swiss companies call UBS their bank. Their reach extends to 80% of all the wealth of the Swiss.

Credit Suisse is the second largest Swiss bank in the world after UBS. The bank dates back to 1856. Since then it has grown immensely to achieve a global presence. The bank counts operations in more than 50 different nations. It employs over 48,000 staff who hail from in excess of 150 different countries. In 2006, it started operating as a globally integrated universal bank.

This broad footprint has enabled both banks to create a well balanced revenue stream and to capture many new assets geographically. It provides them with significant opportunities to grow throughout the globe today.

The Credit Suisse and UBS strategies work off the banks’ three critical strong positions. They are both leaders in worldwide wealth management. The banks are also standouts for specific investment banking abilities and skills. Finally they have a powerful regional footprint in the home nation of Switzerland.

The banks employ a well balanced strategy of gaining opportunities for wealth management in key emerging markets. This largest focus for them centers on the most important growth area of Asia Pacific. They also strive to serve critical already developed markets while focusing on the original country Switzerland.

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The term 'Swiss Banking' is included in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.