Swiss Financial Centre 'Faces Uncertain Times'

by Ulrika Lomas, Tax-News.com, Brussels

26 January 2012

According to a recent study conducted by the Swiss independent economic research institute BAK Basel, the Swiss financial sector will decline in importance at international level over the course of the coming years, resulting in thousands of job losses in the sector.

The financial sector currently contributes around 11% of the Confederation’s gross domestic product (GDP).

Alluding to the findings of the study, BAK director Urs Müller underscored that there could be as many as 10,000 potential job losses in the Swiss financial centre between now and the end of 2013, corresponding to 4.5% of the 240,000 jobs in the entire sector.

The global economy, the emergence of financial centres in Asia as well as increasing tax competition, are all factors that will have an adverse effect on the Confederation’s financial location in the future, Müller explained, while emphasizing that certain regions will be more affected than others, and that banks will be more affected than insurance companies.

BAK director Müller underscored that Switzerland is gradually losing key competitive advantages linked to its traditional system of banking secrecy, particularly as administrative costs linked to regulation are constantly increasing.

Müller warned that smaller institutions active in wealth management would be most affected by increasing “compliance” costs.

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