Particularly in the area of wealth management which comprises over half of the total added value of the banks, Switzerland is clearly one of the world’s leading provider of services. The value of total assets managed in customer accounts in domestic banks as of the end of the year 2003 amounts to CHF 3’300 billion, of which nearly 60% is held by foreigners. According to various estimates, this corresponds to approximately one third of the world’s total private wealth managed abroad. Much has been said and written about the various strengths of the Swiss financial center which account for the dominant global position in wealth management. Political, economic and monetary stability, know-how, traditional high quality of services provided, guaranteed protection of privacy and strict conditions ensuring the prevention of abuse are all key ingredients to Switzerland’s past and future success. In the current global market place, some of these strengths represent structural competitive advantages. The Swiss authorities and the Swiss financial sector representatives rightly  1  Charles P Kindleberger (1974): “The Formation of Financial Centers: a Study in Comparative Economic History”, Princeton Studies in International Finance, No 36, Princeton: Princeton University, November. BIS Review 34/2004  1  make great efforts to defend these structural competitive advantages as much as other sovereign countries defend theirs. Nonetheless, in a fierce global competitive environment, defense is a necessary but not a sufficient condition for sustained success.
While this has positive spillovers for financial inclusion, more can and must be done to ensure that consumer protection policies are designed to adequately protect vulnerable groups, and ensure that financial innovation is pursued in a responsible manner. To address these issues, we are delighted this year to have the participation of the global standard setting bodies together with members of the AFI at this Forum. We share a common interest in seeking to lower the barriers to financial inclusion and to create a larger positive impact of policy measures on financial inclusion. An important starting point is for the global standards to reflect financial inclusion perspectives. The standards setters have pointed out that this is supported by the concept of proportionality which underpins the global standards. Of great importance is how this is going to be translated into practice. By drawing on the diverse experience of AFI members present at this Forum, it is hoped that we can start to build a common understanding of “proportionality in practice”. This is important not only to support the financial inclusion agenda, but also achieve the outcomes of financial stability and consumer protection that were intended by the global standards. This would also promote the wider adoption of these global standards. Increasing risks of financial exclusion Financial inclusion has now progressed from access to financial services, to also being concerned with whether the financial services are appropriate to individual circumstances, and are being used effectively to improve individual welfare.