Jean-Pierre Roth: Switzerland - small, but global Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Chinese Chamber of Commerce (SwissCham), Beijing, 10 June 2005. *  *  *  I am pleased to be a guest here today at the Swiss-Chinese Chamber of Commerce and speak a few words to you. I am sure it is not necessary to convince any of you of the importance of globalisation and trade. You are living proof of our export sector’s dynamism and willingness to adapt to changing circumstances. By your presence in China, you contribute not only to our country’s influence abroad, but also to the expansion of its economy. As you know, economic globalisation often gets bad press in Switzerland. Some of our fellow citizens condemn it, hoping that barriers to delocalisation might strengthen the situation on our labour market. But let’s not be led astray by these scaremongers! Those who succumb to those fears fall victim to an illusion. A policy of inactivity is not synonymous with consolidation, but with decline. It is important to realise that Swiss investment abroad, particularly in low-wage countries, secures the high added value jobs we have at home. As a small country, we therefore have no other choice but to trade with the rest of the world if we want to prosper. This means that we will be continuously faced with the challenge of international competition.
However, this should not stop an action started by the supervisor to deal with a presumed problem in the bank. The supervisory management and staff must also have reasonable protection should they be sued for their bona fide decisions taken as supervisors. In some countries the supervisors are harassed by frivolous lawsuits by bank owners, managers or other parties. Even if the supervisor is in the end acquitted from any guilt, the process may take years. During this time the supervisor will be severely hampered in performing her job having to concentrate on her defence. Such lawsuits will also reduce the willingness of other supervisors to take necessary supervisory decisions, since they are themselves afraid of being sued. A first line of defence is to take all major supervisory decisions in a collegiate fashion at the top level. Thus only the agency such can be sued as an institution. Nevertheless, should individual supervisors be sued, they must be provided assistance in the court proceedings, such as legal counsel and protection against any costs. Of course, if the supervisor is finally found guilty and have not acted in good faith, the supervisory agency could reclaim any outlays. The second issue is that the supervisors must have a sufficiently large and skilled staff with satisfactory resources. With too few, or not adequately skilled supervisors, bank problems may not be detected early enough which may lead to major crises. With too many supervisors interventions in the banks might become excessive, thus interfering in banks’ daily business.