Latest posts by Anastasia Moroz (see all)
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A great damage has been inflicted upon the Swiss competitive spirit by the strong franc, but Yves Mirabaud, president of the Geneva Financial Center, who conducted the poll, stated the threats are nothing but restrictions on immigration from the EU and a failure to pass laws ensuring access to the EU banking market.
Mirabaud stated, that the country’s banks, the majority of which are Geneva-based, should not rely on Britain’s vote to exit from the EU luring banks out of London to the shores of the city’s lake.
He commented: “We must not underestimate the City of London’s resilience, nor should we forget that a presence in Luxembourg, Dublin or Frankfurt would give you access to the European market, unlike in Geneva.”
When asked where they would move to if they left Geneva, 4 in 10 major banks and a great number of smaller banks named Luxembourg, with London also named by the minority. None of them opted for Hong Kong, New York or the Middle East.
A combo of reinforced regulatory scrutiny, a crackdown on U.S. tax-dodging as well as the negative consequences of the financial crisis on returns are the factors making life harder for Swiss private banks, which once had a cosy existence taking care of the money of the world’s wealthy.
The Geneva Financial Center, representing110 banks with 18,855 local workers at the end of 2015, reported that 2 out of 3 banks hiring around 200 people in Geneva claimed 2016 turned out to be “difficult” with 1 in 6 calling 2016 “very difficult”.
The situation was not that deplorable amongst smaller banks, with the quarter of them saying that their business in 2016 was going “well” or even “very well”. Wealth management was a sensible subject for numerous bigger employers, with 9 out of 10 saying Geneva had lost its attractiveness in 2015, and 8 out of 10 stating it had become less attractive for the EU’s rich.
Over 70% of the major banks said wealth management in the first half of 2016 was “difficult” or “very difficult”, and the same number reported total assets under management decreasing by 3-7% over the period, which only a minority blamed on shifting exchange rates.
Three-quarters of the major banks are intending to slash their Geneva staff in 2017, with the third of them saying they estimate to cut jobs by 5%, but smaller banks predict their workforce to go up or stay unchanged, the survey found.