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The Challenges of an International Financial Centre: the Swiss Case

British-Swiss Chamber of Commerce, London, 26 February 2002, 26.02.2002

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The banking sector has undergone profound changes in the 1990s. The trend towards globalisation, which can be observed all over the world, did not leave Switzerland untouched. In this environment, the Swiss banking industry was able to hold its own as a thriving sector of the economy. Its success can mainly be attributed to a service-oriented, well-educated workforce, reliable service, competitive products and an efficient infrastructure.

Nevertheless, Switzerland as a financial centre cannot afford to rest on its laurels. It is subjected to competitive pressure and the trend towards ever-larger financial conglomerates. Moreover, the fight against money laundering and the influx of monies of criminal origin poses another challenge for the Swiss financial industry. Money laundering is not only morally reprehensible, it also undermines the public's trust in the financial centre. Furthermore, Switzerland does not wish to become a haven for monies that flow into the country to circumvent EU regulations and are invested solely for this purpose. Switzerland, therefore, has offered the EU its cooperation, proposing to introduce a tax on interest income of EU citizens. From Switzerland's vantage point, such a system would constitute a fair compromise which preserves the interests of the EU as well as the Swiss legal principles, which protect the (financial) private sphere.