Swiss Finance Industry Aspires To Be In Global Top 3

by Ulrika Lomas, Tax-News.com, Brussels

14 September 2007

An umbrella group representing the Swiss investment and banking industry has published a document dubbed 'Vision 2015', which outlines a joint strategy to put Switzerland among the top three centres of international finance.

The growth targeted by the document would create between 40,000 and 80,000 new jobs, and generate CHF11-17 billion in additional new tax revenues, depending on economic trends and how successfully the strategy is put into practice.

The strategy was announced on September 13 by the Swiss Bankers Association (SBA), the Swiss Insurance Association (SIA), the Swiss Funds Association (SFA) and the companies responsible for Switzerland’s financial infrastructure, including SWX Group, SIS Group and Telekurs Group.

Specific measures with regard to taxation, regulation and institutions have been drawn up for individual industries, and will be put forward for debate in the political arena.

The groups noted that the finance industry is the most important sector of the Swiss economy, accounting for almost 15% of gross domestic product (GDP) and 16% of total tax revenues. It provides some 200,000 skilled jobs, which represents 5% of the whole Swiss workforce.

"The financial sector thus makes a decisive contribution to wealth creation in our country," the report observed.

However, the group went on to warn that there is no guarantee that this success will be sustained in the future, as international competition among financial centres continues to grow at a rapid pace. According to the group, while Switzerland is still viewed as a major financial centre, it has lost ground to its competitors, and has slipped from second place internationally in the 1980s to sixth place today.

To restore its place among the top three global financial centres, the group stated that the Swiss financial sector’s contribution to GDP has to grow by a nominal 7- 9% a year in terms of value, which would be in line with the current growth rates of London and New York.

To achieve this, the group said that the government need to ensure that the Swiss tax system is internationally competitive, particularly in the area of alternative investments. One example would be the gradual abolition of stamp duty. Efficient, market-oriented regulation and supervision is also needed, according to the strategy document. This means more self-regulation and principles-based regulation, and the development of risk-based monitoring.

The document also encourages closer collaboration between the financial industry, the authorities and politicians to strengthen the financial centre with regard to regulation, supervision and taxation, and with the aim of establishing Switzerland as a top destination for research and education, including developing certain initiatives already underway such as the Swiss Finance Institute and the Institute of Insurance Economics at the University of St Gallen.

"With the key points of the joint strategy and vision published today, the Swiss financial sector can set a course from a position of strength that will allow it to enhance international wealth creation, generate further growth and wealth in Switzerland, and continue to make a significant contribution to the economy as a whole," the group concluded.

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