Thomas Jordan: Swiss banking centre – a great past and a successful future? Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss International Finance Forum, Berne, 20 May 2014. *  *  *  The speaker would like to thank Till Ebner for his valuable support in preparing this speech. He is also indebted to Rita Kobel, Marco Huwiler, Peter Kuster and the SNB Language Services for their assistance. Introduction History has shown that important international banking centres can develop in small countries as well as large ones. Switzerland is an excellent case in point. During the course of the 20th century, the banking centre in this country became one of the world leaders in wealth management. With the associated creation of value and employment, the banking industry was transformed into a cornerstone of the Swiss economy. However, for some years now, the prominent international role of the Swiss banking centre has been subject to increasing criticism. Given this situation, Switzerland and its banks are confronted with a fundamental question: Can Switzerland, as a relatively small country, continue to provide a home to a banking centre whose importance is global in nature? In my view, this is possible as long as the following three prerequisites are fulfilled: The services offered by the banks, their crisis resilience and their reputations must all be considerably above average. It is up to the banks themselves, first and foremost, to fulfil these prerequisites.
In terms of the usual indicators of the financial development of a country – such as the size of the financial sector or access to financial services – Switzerland has one of the most advanced  1  Cf. Levine 2005. BIS central bankers’ speeches  1  financial systems in the world.2 At the same time, the economic importance of the banking industry in this country is above average. It generates an annual gross value added of some 6% of GDP and currently employs about 150,000 people. In addition, at least in the years before the financial crisis, the industry made a significant contribution to overall economic growth.3 When banks are familiar with the local conditions and are also able to integrate knowledge concerning Swiss macroeconomic conditions into their business decisions, this enables them to provide particularly efficient services to the Swiss economy. It is therefore advantageous for our country to have locally established banks which make their decisions here in Switzerland. It is not only with services which benefit companies and households located in Switzerland that the Swiss banking industry creates value added. As we all know, the industry is also very active in the international arena – on the one hand, via exports,4 that is, through the cross- border provision of financial services from Switzerland, and on the other, through its actual presence abroad. In this respect, the most important source of income is the crossborder wealth management business for private customers.