The Swiss Banking System & Financial Market

Key Facts & Institutions

Term Paper (Advanced seminar), 2010

14 Pages, Grade: 1,2


The significance of the Swiss Financial Centre

The Swiss financial centre, with banking as its leading segment, is of immense international significance and is positioned amongst global market leaders. The financial centre contributes greatly to gross value added in Switzerland and by doing so to the wealth of the whole Swiss population. (Swiss Bankers Association, 2010)

In many aspects the banks are highly important to the Swiss economy. In terms of employees they offer a wide range of skilled jobs with potential earnings that are above average; a great portion of public sector financing is secured do to their tax contribution; and not to forget that they are centres of innovation and drivers of value added thus generating momentum for the entire economy. (Swiss Bankers Association, 2010)

Key information on the Swiss economy along with value added and employment are given in the tables below and in the appendix.

Abbildung in dieser Leseprobe nicht enthalten

Characteristics of Swiss Banking System

The development of the Swiss banking system began in the middle of the 18th century. When comparing the economic importance and its share in world trade, Switzerland has a large banking and financial sector. The country is one of the leading financial centres after New York, Tokyo and London. Switzerland banking system is highly efficient and secure. Swiss banks function with the maximum equity ratios of all, which makes Swiss banking appealing to both market analysts and investors. Swiss banks are obliged by rules and regulations to support their transactions with capital ratios which are the greatest in the world. Major Swiss banks continuously achieve high marks for reliability and security from main credit rating organizations (Bode, 2006)

The success of Swiss banks has been achieved by solid accomplishments. For centuries, Switzerland has had social, political and fiscal stability. Despite continuous changes in the banking sector, Swiss bankers adhere to proven fundamental principles and strict codes of conduct set forth by organisations like the Swiss Bankers Association (SBA). (Bode, 2006)

Swiss law is responsible for assigning concern to safeguard the freedom of the individual. All Swiss and foreign citizens are considered to be equal in front of the law. Those who do business with Swiss bank thus benefit from the legitimate protection of their personal assets. Safeguarding the identity of the customer is very important and that is why the accounts in Switzerland banks are identified by numbers only. The numbered accounts are simply an enhanced means of security in preserving the clients justified entitlement to discretion. The bank confidentiality in Switzerland is a right and obligation which every bank worker is legally required to fulfil. (Bode, 2006)

Diversity of the Swiss Banking System

Besides the qualities previously listed, the Swiss banking system offers a wide variety of services. The system is set upon the model of universal banking, in which all banking services can be offered by all banks. None the less, different bank groups have developed and in turn focus in certain services. (Bode, 2006)
The Swiss banking system areas of business include the lending business, property management, savings recommendation, payment dealings, stock exchange dealings, deposit business, underwriting business, financial analysis and its core business wealth management (see table below). This is contrary of banking systems which split commercial banking from investment banking, commonly found in Anglo American countries and in Japan. The universal banking advantages include the ability to service customers from all areas of the economy and more importantly spread risk over a number of banking services. (Bode, 2006)

Abbildung in dieser Leseprobe nicht enthalten

Structure of the Swiss Banking Sector

The 325 banks in Switzerland are divided into various categories by the Swiss National (SNB). They are: big banks, cantonal banks, regional banks and savings banks, Raiffeisen banks, other banks (including, stock exchange banks and commercial banks, as well as foreign-controlled banks), private banks and branches of foreign banks. Each bank category varies with regards to company focus, size, geographic range of activities and legal form. A dominant place within the banking sector is held, in every respect, by the big banks. This applies to both balance sheet total and the market share. (Federal Administration Swiss Statistics, 2009) For more details on the above mentioned banks, please refer to the table below and the appendix. (Swiss National Bank, 2010)


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The Swiss Banking System & Financial Market
Key Facts & Institutions
University of East London  (Business School)
International Financial Institutions and Markets
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ISBN (Book)
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swiss, banking, system, financial, market, facts, institutions
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Jan-Patrick Stolpmann (Author), 2010, The Swiss Banking System & Financial Market, Munich, GRIN Verlag,


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