Switzerland: compliance costs are driving banks away
The number of foreign-owned banks has fallen by over 10 per cent, to 129, in the 17 months to the end of May, according to the Association of Foreign Banks in Switzerland. The Independent cites a 'crackdown on bank secrecy and increased regulatory scrutiny' as factors promoting the exit of the banks as well as pushing some of them into mergers with each other. Lloyds Banking Group, for instance, sold its international private banking business to Union Bancaire Privee in May this year.
Switzerland is the world's leading centre for holding funds offshore but its lead is slipping, according to the Boston Consulting Group's Global Wealth Report. This shows a fall from 27 to 26 per cent in 2011. Boston Consulting says that Switzerland's share could fall to 25 per cent in the next four years. Switzerland is in the process of reducing the level of secrecy it offers to foreign residents - through agreements with Britain and Austria to collaborate with their tax authorities and through successful attempts from the US to get more information on US citizens who have money parked in the Swiss state.