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Swiss government look to open doors for banks abroad
[BERN] The Swiss government will work to boost the competitiveness of the country's financial sector against international rivals, it said on Thursday, striking a more supportive tone towards the industry.
Home to banking and insurance giants UBS, Credit Suisse and Zurich Insurance, Switzerland is the world's biggest centre for foreign wealth, with an estimated US$2.3 trillion kept in the Alpine country.
However, its banks have been under pressure for years as a global clamp-down on tax evasion has eroded bank secrecy rules that had helped the world's wealthy keep cash hidden from the taxman.
The government said in its first industry report since 2012 it had a responsibility to guarantee the best conditions for Swiss financial firms. "Switzerland's financial centre should continue to assert itself as one of the world's leading locations for financial activity and can strengthen this role further," it said in the report prepared by the finance ministry.
It marked a more accommodating tone towards the financial sector under new Finance Minister Ueli Maurer, who replaced Eveline Widmer-Schlumpf at the start of 2016.
Widmer-Schlumpf had supported tougher regulation and helped draft new too-big-to-fail (TBTF) rules, which included tough capital requirements for UBS and Credit Suisse.
The State Secretariat for International Financial Matters (SIF), a branch of the finance ministry, will review the TBTF law every two years with a particular focus on its impact on banks' international competitiveness, the government said.
Continued access to foreign markets is essential for financial services firms, the government said, adding a comprehensive agreement with the European Union covering financial services was a long-term option.
Switzerland is not a member of the EU and uses bilateral agreements to give certain industries access to the single market, although this does not include financial services.
In the meantime, Switzerland will look for bilateral agreements with partner countries as well as EU equivalence recognition for select Swiss financial regulation.
The government said Britain's vote to leave the EU would lead to considerable short- and mid-term uncertainty for banks with UK operations, but that it was too early to say what impact Brexit would have on the Swiss financial centre.
It also raised the possibility of increased market access between Britain and Switzerland after Britain had left the EU.
The government reiterated its commitment to support financial innovation by reassessing Swiss regulations, warning a framework that was no longer up-to-date could harm Switzerland's competitiveness by hindering market entry for new providers.
In April, the Federal Council tasked the finance ministry with reviewing its regulatory framework and suggesting possible action in the fintech area by autumn 2016.