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Bank groups
Variety within the Swiss banking system
Apart from numerous other qualities, the Swiss banking system is noted
for its variety. The Swiss banking system is based on the concept of
universal banking, whereby all banks can offer all banking services.
Nevertheless, it has seen the development of different bank groups that
have come to specialize in certain areas.
The Swiss universal bank offers it all
The Swiss banking system is based on the model of universal banking.
This means that all banks can provide all banking services, such as:
•credit/lending business
•asset management and investment advice
•payment transactions
•deposit business (savings accounts, etc.)
•securities business (stock exchange transactions)
•underwriting business (issuing of bonds)
•financial analysis
This is directly opposite of banking systems in English-speaking
countries and in Japan which separate commercial banking from investment
banking. Legislation is, in fact, currently underway in the United
States to liberalize the system.
The advantages of universal banking include the ability to spread risk
over a greater number of banking businesses and customers from all
sectors of the economy.
Specialized bank groups
Banking in Switzerland is extremely diverse, even though it is based
on the principle of universal banking. Several bank groups are now fully
or partially specialized:
The "big" banks
The two "big" banks - UBS AG and the Credit Suisse Group - together
account for over 50% of the balance sheet total of all banks in
Switzerland. UBS AG is the world's leader in wealth management and also
Switzerland's leading bank for individual and corporate clients. It is
also an important global player in investment banking and the securities
business. Credit Suisse is a leading global bank headquartered in
Zurich. Credit Suisse is renowned for providing expert advice, holistic
solutions and innovative products to a wide range of corporate and
institutional clients and high-net-worth individuals globally, as well
as retail clients in Switzerland.
Cantonal banks
Formerly one to two per canton, there are today a total of 24
Cantonal banks (in Switzerland's 26 cantons and half-cantons); Cantonal
banks are semi-governmental organizations with a state guarantee.
Liberalization is currently underway with respect to the state
guarantee. Despite their close connection to the state, cantonal banks
must comply with commercial principles in their business activities.
Their objective, according to cantonal law, is to promote the canton's
economy. Field of activity: engaged in all banking businesses; emphasis
on lending/deposit business.
Regional banks and savings banks
Smaller universal banks with an emphasis on lending/deposit business.
These banks voluntarily restrict their activities to one region.
Advantage: customer proximity -- they are acquainted with local
circumstances and with regional business cycles.
Raiffeisen Group
As a group of banks with the largest branch network in Switzerland,
the Raiffeisen banks together form Raiffeisen Switzerland, which is
responsible for the entire Raiffeisen Group strategy and for group-wide
risk management. It also coordinates the group’s activities, creates the
conditions for the business activities of the local Raiffeisen banks and
advises and supports them in all issues. The bank group, which is
structured as a cooperative, is one of Switzerland’s leading retail
banks. In recent years, Raiffeisen has positioned and established itself
as the third largest bank group in Switzerland. Raiffeisen meanwhile
counts 3 million Swiss citizens among its customers. Of these, some 1.4
million are members of the cooperative and hence co-owners of their
Raiffeisen bank. They value the decisive benefits of Raiffeisen:
Proximity to the customer, support, reliability and the exclusive
benefits for members of the cooperative.
Private banks
Among the oldest banks in Switzerland. Legal form: individually
owned firms, collective and limited partnerships. Private bankers are
subject to unlimited subsidiary liability with their personal assets.
Field of activity: asset management, chiefly for private clients; as a
rule, private banks do not publicly offer to accept savings deposits.
Foreign banks
Foreign-control means that over half of the company's votes are held
by foreigners with qualified interests. Origin of banks: Europe,
predominantly EU (over 50%), Japan (around 20%). Fields of activity:
foreign business (share of foreign assets in the balance sheet total is
70%), asset management.
Other banks
This bank group includes banks with various business objectives,
such as: institutes specializing in the stock exchange, securities and
asset management businesses; commercial banks: as a rule, these are
universal banks for which mortgage investments play a significant role,
in addition to commercial loans to trade, industry and commerce; and
consumer credit institutes: institutes specializing in small loans (to
private individuals and the industry).
Swiss Financial Center - Players
Swiss Bankers Association
The Swiss Bankers Association (SBA) was founded in 1912 in Basel as a
trade association and today has nearly 355 institutional members and
approximately 16'800 individual members. The Association’s Office
employs a staff of about 60. 11 commissions and associated working
groups deal with key issues affecting the industry. Serving on these
commissions are some 583 representatives of various banking groups as
well as specialists from the SBA.
www.swissbanking.org
Swiss Banking Ombudsman
Any customer who has a dispute with his/her bank but does not want
to go to court may contact the Swiss Banking Ombudsman. The ombudsman is
a neutral and independent office for resolving customer disputes.
Although it has no powers of arbitration, it mediates between the
parties to the dispute. Thus, it can recommend and advise, but not
prescribe, a particular solution. Nevertheless, the ombudsman
successfully mediates in many cases.
www.bankingombudsman.ch
SIX Group
SIX Group was formed at the start of 2008 by the merger of SWX Group,
SIS Group and Telekurs Group. As an internationally active
infrastructure company, it is a cornerstone of the Swiss financial
sector. As one of Europe’s leading securities exchange and financial
market infrastructure operators, SIX Group. offers first-rate services
that address all aspects of Swiss and crossborder securities trading as
well as the admission of securities to trading. The company’s other
business fields focus on rendering cost-effective and efficient services
in the areas of clearing, settlement, securities safekeeping and
administration, as well as supplying international financial information
for investment advisors, portfolio managers, financial analysts and
administrators of securities transactions. In addition, its services in
the area of payment transactions cover the acceptance and processing of
payments made with credit, debit and customer cards, as well as the
handling of interbank transfers and e-invoices.
www.six-group.com
Swiss Financial Market Supervisory Authority
The FINMA is responsible for the supervision of banks through
statutory auditors. It grants new banks authorization to begin
conducting business. In the event of a violation of law or other abuses,
the FINMA can order appropriate corrective measures. If the case is
serious enough, it can withdraw the bank's operating permit.
www.finma.ch
Swiss National Bank
The SNB is the central bank of the Swiss Confederation, and it runs
the country's monetary policy independently. As lender of last resort,
it bears some responsibility for ensuring that the Swiss economy has
sufficient liquidity. However, unlike the Bank of England, for instance,
it has no regulatory powers - banking supervision is the purview of the
Swiss Financial Market Supervisory Authority.
www.snb.ch
Financial intermediaries without bank status
In addition to the banks and their various bodies, the Swiss
financial sector also plays host to financial intermediaries without
bank status. These intermediaries, which are regulated by a special
federal authority, include the management companies of Swiss investment
funds (under the Investment Fund Act), life insurance companies (under
the Insurance Supervision Act) and securities traders (under the Stock
Exchange Act). A number of other financial intermediaries are only
governed by the Money Laundering Act.
These include anyone who looks after other people's assets or helps to
invest or transfer them, such as asset managers, brokers, bureaux de
changes, lawyers, credit card companies etc.
Independent asset managers in particular form a large and important
group. They are brought together in the Swiss Association of Asset
Managers (SAAM) VSV. The total assets under management by SAAM members
is estimated at CHF 100bn, which equates to 3% of the overall market.
Independent asset managers maintain close relations with one or more
banks, the banks being responsible for customers' accounts and custody
accounts.
www.vsv-asg.ch
Source: www.swissbanking.org
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