Swiss banks are known for banking secrecy laws. While there are no numbered accounts any more, Switzerland is finding it difficult to bear the pressure from the international community to totally lift the secrecy laws. However, it is now levying a withholding tax on investment returns, besides putting in place laws to combat financing of terrorism , money laundering and tax frauds, but not tax evasion. Switzerland continues to thrive as an excellent offshore banking center with top class customer service and talented investment personnel. The strong macroeconomic fundamentals and socio-political stability also help the banks to prosper.
Switzerland is a nation well-known for its independence, neutrality and secretive banking system. Known for being a neutral nation, Switzerland did not participate in either of the two World Wars. Until 2002, it wasn't even a member of the United Nations. Yet, it has been very active in the UN (as a non-member) and many international organizations. It is a part of the European Union, but continues to persist with its domestic currency, the Swiss franc, with no intention of embracing the euro, the common currency of the European Union. It believes in market economy and has a very low unemployment rate. This economically prosperous state still persists with unique bank secrecy laws. It is, therefore, no surprise that this nation has become a safe haven for investors, internationally. This is a major international financial center, but is often accused of supporting money laundering and drug trafficking activities.
Swiss banks are principally known for privacy, safety and growth. The major banks concentrate on government business, lending and investing in major MNCs, besides offering wealth management services to rich people. However, many banks take good care of the banking needs of the common people as well.
The Swiss currency is a very stable one and has the unique distinction of being backed by more than 100% of gold. There are practically no exchange control regulations in Switzerland. Thus, a stable currency, low inflation and a deregulated external sector offer the right recipe for a strong banking sector, which welcomes both domestic and foreign investment. Swiss banking laws ensure that banks maintain adequate capital and remain highly liquid. Perhaps Swiss banks are the only banks in the world, where many private banks maintain liquidity at close to a 100% level. The banking system's capital occupies 7-9% of the total liabilities, which is a very high percentage, in terms of international standards. |
