Switzerland Debates Banking Reform

The Swiss government is in the process of debating a set of reforms to the nations banks that would ensure a greater level of stability in the wake of the financial crisis.

London, UK (Pryce Warner International) June 10th, 2011 – The proposals are designed to ensure that Swiss banking practices have higher levels of regulation and are focused around principal UBS and Credit Suisse.

Proposals being considered would require that the capital standards for UBS and Credit Suisse should go up, and even exceed those currently set by the Basel III international banking standards. The regulations would require both banks to an equity Tier 1 capital ration of at least 10%, compared with the present 7% required by Basel III.

There is considerable controversy over the debate as some members of government are pushing for greater reforms to ensure that Swiss taxpayers do not have to bail out banks again, while others say the reforms will damage Swiss bank’s competitive advantage.

The Vice Chairman of the Swiss National Bank came out in support on the stricter framework stating that they would safeguard the economy and that stricter regulation could provide a competitive advantage as other countries would have less stable banking sectors.

The full upper house of the Swiss government will debate the measures over summer before the decision is passed onto the lower house. If it is successful the bill will become law by early 2012.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International Group, a Financial Services Provider for Expats worldwide commented: “These new measures will likely be a positive impact for the Swiss banking sector as the additional security should ensure that severe financial crashes are much less likely in the future. This will certainly raise the popularity of Switzerland as an international banking sector among investors and Expats looking to base their finances overseas. Expats already in Switzerland benefit form advantageous tax rates and this additional security for the banking sector should ensure even greater advantages for them. Any investors or Expats outside Switzerland considering investing or moving their finances to the region would be in a good position to do so should these regulations come into place. Anyone considering much a move should ensure that they speak to a professional financial advisor before doing so, so as to ensure that the process is handled as thoroughly and smoothly as possible.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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