Swiss private banking sector crave deal with EU, good exchange rate17 May 2019
Association of Swiss Private Banks and Association of Swiss Asset and Wealth Management Banks claim the new framework deal with EU is vital if Switzerland wants to create wealth. Private banking sector craves also more government support regarding data protection and taxation issues
Private banking sector wants EU deal
All together 35 companies hiring 26 thousand employees are members of both associations. In the hands of private bankers there is $2.4 trillion of offshore assets. Recently the associations’ focus was the bilateral deal between Switzerland and the European Union. The framework agreement is subject to negotiations. Existing bilateral agreements are supposed to be replaced by one new deal. It touches on many subjects, but among them is also the access to the common European market by Swiss banking sector. There is much at stake here, as around CHF1 trillion under management of Swiss banks belongs to residents of the EU. Such data was provided by Yves Mirabaud, who is the head of the Association of Swiss Private Banks, as well as senior managing partner in Mirabaud bank. Private banking sector is afraid that the rejection of the deal between the EU and Switzerland might harm the process of creation of wealth in the country.
Lack of deal will be harmful according to bankers
Not only management of wealth will be harmed by no-deal with the UE, but also the whole economy might be influenced in a bad manner. Banking sector sees the deal as the strengthening of Switzerland’s international position. By rejecting the deal Switzerland will put into the jeopardy relations with the EU. Many residents of the EU living in Switzerland or being cross-border workers will be influenced as well as Swiss residing abroad. As economic data shows the dynamics of the common, euro-zone market is bringing huge profits to Switzerland, even though the country itself is not a member of the union. If the current deal is terminated, and no new bilateral agreement is decided upon, the economy’s growth might get vastly affected. That is the stance of private banking sector, but not everyone agrees with it. The biggest opponent to the new EU deal is the nationalist Swiss People’s Party. Some views expressed by opponents suggest that Switzerland is anyway a big partner for the EU, so it won’t ignore it, even if no deal is implemented.
More government support is needed
The EU deal is not the only matter that bothers recently the two private banking associations. The sector would like to receive more support from Swiss government, especially when it comes to taxation and data protection issues. Switzerland generally has low taxes and lean administration, but finance market is an exception. There are an additional withholding tax and stamp duty that are considered a huge burden by private banking sector. The Swiss government has plans to reduce the withholding tax on dividend payments to 15 percent from 35 percent. Private banks crave for this new law to be passed quickly and smoothly. There are not specific dates yet for that. When it comes to data protection, private banks see cyber security as the biggest challenge. Therefore, there is expressed a desire to create a national competence center for cyber security by the federal government. The case is urgent, according to bankers. The next annual private banking day scheduled for today – May 17th – and taking place in Lucerne is focused around cyber security and data protection.
Euro franc exchange rate drops further
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