Summary of a speech delivered by Jakob Schönenberger, President of the Bank Council

In his opening speech, the President of the Bank Council, Jakob Schönenberger, dealt with the structural changes in the Swiss banking industry. He referred to the abolition of cartel practices and the economic decline at the end of the eighties, which revealed the unsound structures that had developed in the economy and the banking industry. The steep fall in real estate prices had particularly drastic effects, compelling the banks to write off the very substantial amount of Sfr 42 billion for domestic loans and to make painful adjustments to their business policies during the period 1991 to 1996.

The merger of UBS Union Bank of Switzerland and Swiss Bank Corporation does not yet mark the end of structural change in the Swiss financial centre. The President of the Bank Council finally pointed out that the rapid pace of change in the financial sector not only poses considerable challenges for the banks, but also for the authorities with responsibility in this field. As the financial crises in Asia again demonstrated, the regulatory framework must be designed so as to provide the market forces with sufficient leeway to bring their disciplining effect to bear. Only a financial sector exposed to the market forces can contribute permanently to prosperity.