Philipp Hildebrand: Setting the course for the Swiss economy -
challenges for the Swiss financial centre and outlook for the future
Summary of a speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the
Swiss National Bank, to the Zürcher Volkswirtschaftliche Gesellschaft, Zurich, 17 May 2010.
The complete speech can be found in German on the Swiss National Bank's website (www.snb.ch).
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The Swiss banks face two major challenges. First, sooner or later, they will have to carry out
their core business - asset management for foreign customers - in a tax-conform
environment. Second, the big banks will be required to operate under more stringent
regulatory requirements. These challenges are likely to lead to structural changes in the
financial centre. How are such changes likely to affect the Swiss economy? An empirical
analysis shows that, although the financial centre plays an important role in the Swiss
economy, it also entails considerable risks. In the case of cross-border asset management,
the relationship between the risk to the economy and the income earned is acceptable.
However, this is hardly the case for the banks' own trading activities. Consequently, current
regulatory efforts could not only improve the stability of the financial sector, but also increase
both the profitability of banks and the benefit which the Swiss economy derives from the
financial sector over the long-term period. Meanwhile, it is of key importance, not just for the
financial centre but for Switzerland as a whole, that an acceptable solution be found for the
taxation of foreign bank deposits.