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Closer Swiss-Singapore cooperation in financial sector

The Finance Minister of Switzerland, Federal Councillor Ueli Maurer, who visited Singapore recently with a high-level delegation, highlights the benefits of broadening and deepening bilateral financial relations in an exclusive interview.

"Singapore has a wide and deep pool of highly educated local financial professionals and is an attractive place to live in for financial industry experts from Switzerland." - Swiss Finance Minister Ueli Maurer

Question: Why did you choose Asia and specifically Singapore for a first joint trip of a ministerial delegation together with the Swiss Bankers Association and a high-ranking delegation from the Swiss financial industry?

Ueli Maurer: Asian countries are among the fastest growing economies in the world. Switzerland has very good and close relations to the countries in the region, also with Singapore, which has a special role in the region as a financial hub. For the Swiss financial industry, Singapore has become a key partner in Asia, in particular for wealth management. Many of the Swiss banks, insurance and financial services in general have substantial investments in Singapore and have made it a second home.

As small countries with open and competitive economies, Singapore and Switzerland have a lot of commonalities and common interests. Therefore, I believe it is in both countries' interest to strengthen their cooperation in the area of financial markets. So this visit was a very timely opportunity to deepen these ties and it was good and important to be able to do this with representatives of the financial industry that have a vital interest in their businesses in Singapore.

Question: What are your impressions of your Singapore visit? Who did you meet and how did your meetings go in Singapore? How is the government-to-government cooperation progressing?

Mr Maurer: I had very productive and open exchanges with Lawrence Wong, Second Minister for Finance, and representatives from MAS. We also visited the GIC, Singapore Stock Exchange and Lattice 80.

It was important to agree that both countries focus on integrity and good reputation: we are both committed to international standards and are advocating reasonable and sensible regulation that boosts stability and competitiveness. We agreed that such standards need to be adopted by all relevant financial markets.

Since 2015, Singapore and Switzerland are engaged in a financial dialogue. Also, the bilateral cooperation on tax matters works well; the implementation of the mutual Automatic Exchange of Information is in good progress. So I would say that the government-to-government cooperation, particularly in the area of financial markets, is ever deepening. Good to see that we are intent on strengthening our respective competitiveness.

Question: Swiss financial institutions have a large and growing footprint in Asia. How do you see the opportunities for future growth and the challenges that might lie ahead?

Mr Maurer: Swiss financial institutions have a long-standing presence in Asia, not only in Singapore but also in Japan, Hong Kong and China. Asian economies continue to grow fast. Access to capital and global financial services are an essential element to further growth. It is therefore only natural that the Swiss financial institutions are set to grow in Asia.

They provide first-class financial services to the booming industries and growing middle classes. It seems quintessential that protectionism, particularly in the area of financial services, will not undermine this mutual potential. One of the reasons why I set out on the trip to Asia was to improve the framework conditions which allow Swiss financial institutions to better serve their clients in Asia.

Question: In your view, how important is Singapore for Swiss financial institutions?

Mr Maurer: Singapore is a very interesting city: located in the middle of Asia, politically stable, economically open and endowed with an efficient and reliable financial eco-system. In addition, Singapore has a wide and deep pool of highly educated local financial professionals and is an attractive place to live in for financial industry experts from Switzerland. As mentioned, numerous players of the Swiss financial industry are actively and successfully present in Singapore. We estimate that around 10,000 jobs are created in the field of the financial services, thanks to Swiss investments. It is not a coincidence that even the Swiss National Bank has an office operating out of Singapore.

Question: Switzerland and Singapore are both important global financial hubs - are they competing or complementing each other? What can the two leading financial hubs learn from each other?

Mr Maurer: Switzerland has one of the best, most stable and most competitive financial centres with a very strong expertise in global wealth and asset management - some might also say the same about Singapore. So, at a first glance, Singapore and Switzerland might be seen as competing financial centres. But, in reality, they are rather complementing each other: Swiss institutions in Singapore that are providing services in the region appreciate the closeness to clients in Asia, whereas the Swiss institutions at home focus heavily on the markets in Europe.

As large financial centres, Singapore and Switzerland have been affected by the financial crisis and the subsequent regulatory developments. But both places proved their resilience and the value of longstanding expertise and qualities.

Question: During the Asian trip you also visited Beijing and Hong Kong. What are the plans of the Swiss finance institutions for China?

Mr Maurer: Switzerland has very good relations with China and Hong Kong. We are among the few countries that have free trade agreements with both Hong Kong and China. Swiss financial institutions have already a strong presence in Hong Kong. And they were among the first foreign institutions that opened a subsidiary in mainland China.

Our industry is interested to build on its longstanding presence and expand its business there. In addition, I see a lot of potential for further collaboration between Swiss and Chinese financial institutions within the Belt and Road Initiative.

Question: How is Switzerland supporting the upcoming fintech industry and do you foresee cooperation with Singapore in this area going forward?

Mr Maurer: Financial innovation is an important driver for growth of financial centres. According to the rankings by the World Economic Forum and others, Switzerland is the world's most competitive economy. The country is closely linked to foreign economies, offers first-class education - in particular in technology - as well as excellent infrastructure, and a high quality of life. Switzerland is therefore well positioned to be at the forefront of the digitisation of the economy. In this context, fintech plays an important role in the government's financial market strategy.

Switzerland is set to be the first country to introduce one single fintech licence for different business models. At a bilateral level, our supervisory authorities entered into a cooperation agreement for innovation in the financial sector and fintech will remain a topic of interest in our bilateral dialogue. Furthermore, my State Secretary Jörg Gasser will participate in this year's FinTech Festival in Singapore - there will certainly be important exchanges for both sides.

Question: What other significant emerging trends do you see that might be important for highly developed financial hubs like Switzerland and Singapore?

Mr Maurer: With the digitisation of financial services progressing, data security will become increasingly important. Financial places will need to adjust to and implement further instruments to address these challenges, in particular with regard to cyber risks. Another very important branch of Swiss financial services, insurance, will realise a lot of potential in assessing and insuring cyber risk.

Furthermore, on the economic environment, the low level of interest rates will continue to challenge previous models of wealth accumulation. However, institutional investors such as pension funds are not yet willing to take on more risks, so financial places will need to find a way to channel institutional wealth to profitable long-term investments, such as in infrastructure. Therefore, private infrastructure financing will play a more prominent part on the agendas of financial institutions.