“We are extremely happy that the Swiss Federal Council is now planning to restart the regulatory dialogue in financial services between Switzerland and the EU,” says Roman Studer, the new CEO of the Swiss Bankers Association.
We sat down with Studer to discuss his top priorities during the first few months of his tenure.
Let's begin with the biggest issue of the year, the Credit Suisse-UBS merger. What are, in your view, the consequences? Who are the biggest winners, and who are the losers?
Obviously, the biggest loser is Credit Suisse itself, and that's very sad. It has a very proud 167-year-old history, it's a Swiss institution – but at the same time, failure is inherent in any market economy, so that can happen.
Speaking of winners, who do you see in private banking?
What we see is that – again, typical of a market economy – there is healthy competition. So we see that other successful players, especially the bigger private banks in Switzerland, are able to absorb some of Credit Suisse’s business. It's also clear that the biggest chunk of Credit Suisse’s past business is being absorbed into UBS.
What about corporate banking?
In corporate banking, I guess it's a bit more mixed, but it's early days to say, right? We will see over the years how it evolves, but we see that some of the bigger cantonal banks are successful. We also see that some of the foreign banks that operate in Switzerland can profit to some extent from this crisis.
What are the effects of the merger on the Swiss retail business?
Again, we see there's some movement towards domestically oriented banks, but also the movements haven't been very pronounced.
What lessons can we learn from the Credit Suisse case, from a regulatory perspective?
I think that number one, it's important not to make any quick fixes because the problem is very complex. It's really, really important to first gather all the relevant facts and then come to conclusions and to devise targeted solutions.
Has the image of the Swiss financial center suffered as a result?
It's very clear that there has been bad publicity. That's natural. It has, however, focused on Credit Suisse. It's been very clear that the rest of the banks are stable. It's also very clear that the response was swift and ensured stability. We also see that people are a bit more critical inside Switzerland than outside Switzerland. We hear a lot from foreign regulators, but also from clients, that they saw the Swiss acting very swiftly and decisively. What you also see is that the Swiss reputation – the “Swiss banking” brand – continues to be very strong.
The Swiss financial center is coming under some pressure with regard to sanctions and oligarch money. Your point of view?
When we talk about sanctions on Russia, it has to be said that Swiss banks, like other banks and other industries, conducted business legally with Russian clients before the war according to all rules and regulations. With the war, obviously these rules and regulations – including sanctions – changed dramatically, and rightly so. What the Swiss banks do is fiercely implement the sanctions, very rigorously. What we also see is that the risk appetite of Swiss banks for non-sanctioned Russian clients is quite low compared to other financial centers. We see that many other financial centers do not impose sanctions, as well. And we do see the result of that: the result is that a lot of the non-sanctioned Russian money has been flowing out of Switzerland.
Now, let's talk about two of the Swiss Bankers Association's top priorities. EU market access as the first one. Where do you stand here?
Well, the banking sector is one of the main export industries of Switzerland, and the biggest export market is Europe. So if you cannot conduct that export, then the entire business is at risk. So being on good terms and being able to provide cross-border services is absolutely essential for the banking sector. This is why we are extremely happy that the Swiss Federal Council is now planning to restart the regulatory dialogue in financial services between Switzerland and the EU. The aim of that dialogue is to safeguard the present cross-border access, and then we can hopefully advance that further.
Another priority is sustainable finance. The banks haven't been successful in freeing themselves from the accusation of greenwashing. What is the Swiss Bankers Association doing in this regard?
Well, in a sense, I think it's not the right discussion to have because I don't know anybody who is trying to deceive people on purpose.
What is the right discussion then?
Well, the right discussion is how to act in an environment – in sustainable finance – that is rapidly emerging. The main problem really is that there is no single definition of green. There is no single definition of sustainable. Then the data that you can get to measure some of the indicators is not of high quality, and the methodologies are evolving all the time. So in this environment, you probably need to do two things. First, to be transparent about what you do, the data you use and the methodology you use, but also be transparent about the limitations. And our conviction, in a regulatory area that is evolving fast, is that we should have a flexible instrument that can quickly adapt to best practices on data methodologies. And that, in our view, is self-regulation.
What strengths and attributes should the Swiss financial center use to position itself globally?
The Swiss financial center has many strengths, but I want to name three. First and foremost, it’s the quality of the services and the products. And we have a long, long tradition of that. The second one is surely the stability of the financial sector, but also Switzerland more broadly. And the third is that we have a liberal economic policy environment that is very open to innovation and at the same time ensures stability.
Where do you see the biggest opportunities? Where are the biggest risks in your view?
On opportunities, I think it’s the two megatrends that are here to stay: digital finance and sustainable finance. Switzerland is very well positioned here and has a long tradition of innovation. As for risks, again, it comes back to Switzerland as an export nation, and also to banking as an export industry. So if we as a country are able to make sure that we get freer access to new or big markets, then I think we will be even more successful.