Good Example Of Banks Of Switzerland Research Paper
Switzerland is one of the most important financial centers in the world. Its banking system is much higher than the volume required for domestic transactions. There are two interconnected banking system: the state system, including the Swiss National Bank and the banks of the cantons, and the system of private banks. Swiss National Bank, which started its operations in 1907, is the only financial institution that issues the national currency. The basic monetary unit, the Swiss franc, is one of the most stable currencies in the world. The National Bank is controlled by the federal government and has a great influence on the economic policies of the confederation. (Department, International Monetary Fund, 2014).
The Swiss banking system is composed of a large number of different banking institutions under the names of commercial, mortgage, savings, private, cantonal, local and international banks, in addition to which there are a number of financial companies such as banking. Except for the savings banks, most banks either directly or through its subsidiaries carry out a variety of banking and financial transactions, although some of them - it concerns mainly private banks - specialize in specific areas.
In this paper will be discussed issues related to the banking system in Switzerland. Particular attention will be paid to the Swiss National Bank and to the Banking Regulation in Switzerland.
Switzerland is the richest country in the world and one of the most important banking and financial centers of the world (Zurich - the third after New York and London, the world currency market). The country has about 4 thousand financial institutions, including many branches of foreign banks. The Swiss banks 35-40% of the world of property management and property of private persons and legal entities. They enjoy a good reputation among customers due to stable political environment, a solid Swiss currency, the principle of "banking secrecy". Switzerland, as a major exporter of capital, is the fourth largest in the world after the US, Japan, Germany. Direct investment abroad account for 29% of Swiss GDP (the average rate in the world - approx. 8%). 75% of all Swiss investment directed to the development of industry, the most among developing countries attract the Swiss capital of Latin America and Southeast Asia. The share of Eastern Europe in the total investment so far is negligible (Fehrenbach, T., 1966).
The argument for the reliability of Swiss banks is simple - they cannot go bankrupt, because, even if they are involved in risky financial transactions, these banks are in a country with a stable legal, economic, financial, political system, offering first-class facilities and service. The first private banks emerged in Switzerland. Today, there are more than 400 of the country's Confidentiality Swiss bank guarantee under the State Bank Secrecy Act 1934, however, in the framework of the conflict in the first place with the UBS US tax authorities, the bank had to issue the 4450 accounts of American citizens suspected of tax evasion . However, the essence and core of banking secrecy (no automatic release of information on non-resident accounts in Swiss banks) remained intact.
Swiss National Bank (SNB, Schweizerische Nationalbank) has been operating since 1907, and it should be noted, has a peculiar structure of the share capital. About 60% of capital is owned by the cantons, cantonal banks and other entities of public law, and the rest - Swiss individuals and legal entities. The federal government does not own shares of the SNB.
Swiss central bank independence enshrined in the constitution, and can rightfully speak about his real independence in the formation of monetary policy. The Federal Government (Bundesrat) has an impact on its operations, appointing 25 of the 46 members of the Council - the supreme supervisory and control body SNB, its president and vice president. The Federal Council approves the annual report of the bank. State supervision of the central bank is motivated by national value its main statutory objective - ensuring stability of the national currency, its purchasing power and exchange rate (Jeitziner, B., 1999).
As in most developed countries, the law prohibits the SNB lending to the government to cover the federal budget deficit. But as the financial agent of the state SNB provides him with a range of banking services (international payments, collection of bills and checks, facilitating the implementation of government loans, portfolio management, and so on). Although the central bank is the "bank of banks", its function "lender of last resort" is now negligible, as commercial and other banks prefer interbank loans and borrowings in the loan market. In the Swiss banking terminology the term "lender of last resort" is a function SNB designed to perform the task of maintaining stability of the banking system of Switzerland, ie. E. In the event of an emergency threat of bankruptcy SNB is the final authority, which may give the bank the necessary liquidity for its survival. SNB influences the development of the economy indirectly, exercising inherent central bank functions. The main function of the SNB is a modern design and conduct of monetary policy.
Swiss banking secrecy guarantees the confidentiality of information about deposits in Swiss banks for over 300 years. Geneva bankers were court bankers of French kings, and the first written records date back to the Bank Secrecy Act in 1713 year. Until 1934 bank secrecy provisions contained in the Civil and Labour Codes Switzerland. Federal courts to set them in law enforcement - now customers affected by the disclosure of bank secrecy, could subsequently recover from the losses of the bank. Federal Law "On Banking", adopted in 1934, clearly stated that bank secrecy - a criminal law concept. Since that time the bank secrecy banker could be punished with imprisonment, which further strengthened the rights of the depositor to confidentiality of information they pass.
On January 1, 2005 shall come into force the provisions of the European Union, which regulates the exchange of information on investments for tax purposes, which was intended by its creators, will reveal many banking secrets. But it will not affect most famous stronghold of banking secrecy - Switzerland, which is not a member of the EU. Switzerland, located in the heart of Europe, which holds 1/3 of the global private equity continues to closely guarded secret bank deposits, despite the current pressure from the European Union. Of course, the Swiss bank secrecy is not absolute. Swiss law stipulates in detail the situations in which banking secrecy may be partially uncovered.
In the criminal investigation into the actions committed by the offender, it shall be punishable according to the laws of Switzerland. The latter circumstance is essential for bank secrecy, as tax violations are in Switzerland to minor offenses and criminal is not punishable. In Switzerland, tax evasion is not a sufficient legal basis for the disclosure of information constituting bank secrecy. If committed tax fraud, a criminal case in connection with which banking secrecy may be disclosed. Switzerland refuses to cooperate with the courts in their consideration of cases of tax evasion. Today, the Swiss banking legislation meets the highest international standards in the fight against organized crime and counter the "laundering" of "dirty" money. However, this result was achieved without infringing on the privacy of law-abiding customer accounts. In the financial world, Switzerland has taken a unique niche in the field of private banking, where it cannot compete with other financial centers. Pressure from the EU and the US and their requirement to disclose information on depositors is an attack on the fundamental principle of the Swiss banking system (confidentiality of bank deposits). And Swiss bankers can’t even conceive to contradict this principle. They shall respect the law, but do not give up a sustainable, justified banking and tax practices (Vittas, D., 1978).
Why Swiss banks are the most reliable? In Switzerland, there are currently 17 private banking houses (versus 25 in 1983). It is the oldest form of organization Banks (1741). Recall that Swiss banks appeared earlier than in the UK, Germany, Austria. Back in the Middle Ages, Geneva banking houses provided loans monarchs of Europe. Now private banking houses specialize in deposit, trust and fund operations (Parker, H., 1989).
Specificity of Switzerland is an abundance of foreign banks 150, or 40% of the total, which is typical for a global financial center. On the one hand, foreign banks in Switzerland are branches of foreign banks. On the other hand, those considered to be the banks with the founders in one or more foreign shareholders with more than half of the share capital, or if the number of votes they have, allows to talk about providing a major impact on the bank's policy.
The system of banks in the Alpine country is built so that they almost cannot go under. This means that customers can not worry about the safety of their funds. Banks do not promise their investors a guaranteed income; do not use the concept of deposit accounts. In the country's financial system is practically inapplicable practice income from the difference between the promised investor interest rate and the money received from the client profits. Banks are not looking for investment objects that have a high risk in order to earn an income on the difference. Financiers earn the maximum possible means customers not participating in the profits of investors. In addition, Swiss banks rarely give loans.
Banks in the country, in addition, to keep pace with the times and are adopting new technologies that emerge in the financial world. There are almost no use paper checks with signatures and large amounts of cash. They are increasingly being replaced by electronic transfers through internet banking and digital signatures. Of course, the safety of money and no longer provided by the thickness of the wall safes and intricate combination locks, and thanks megabit technology for encoding information. Swiss banks usually offer you a solution that suits the customer best. It does not matter whether it is a lawsuit with a former spouse or political persecution depositor at home. Because the clients of Swiss banks there are also those who wish to defend the capital against high taxes or unpleasant tests (Hans J., 1957).
Tradition to keep their savings in the banks of alpine country is being kept for several hundred years. Probably due to the civilian and local wars that shook Europe and some parts of the world, as well as the case of political unrest. Save your money in the case of so-called "force majeure" circumstances, people always tried. This was in the era of the French Revolution, and during the two world wars, and during the collapse of the socialist system and the subsequent globalization. High reputation of Swiss banks to protect the system of regulation and legislation of the country. They dictate the special conditions for the work of local financial institutions, provide privacy and security deposit accounts of citizens of other countries. One of the secrets of the high level of reliability and stability is in promoting by the government.
Banking Act, adopted in the country in 1934, laid the foundations of privacy in Swiss banks. One of the main reasons why legislators Alpine accept these rules, there was a threat of Nazi Germany. The Nazis tried to force the Swiss banks to give information about customers "for the benefit of the Third Reich." However, the law adopted in this independent and neutral country, provided criminal liability for breach of banking secrecy. It was laid the legal basis for bank secrecy. Therefore even today it is very difficult to gain access to protected data about the identity of investors or the history of their accounts. Government services, the more other countries, it is necessary to prove the commission of customers of financial institutions dangerous criminal. Exceptions may be made for Interpol, if motivated request of the organization Buda contain information on proven money laundering (Vincent, I., 1997).
Swiss banking system has long been associated with the reliability, confidentiality and professionalism. Financial institutions of this state trust their deposits richest and most famous people of the planet. In the accounts of financial institutions of the country kept a third of all funds held in offshore accounts around the world, says unofficial statistics. This proportion is very impressive. The amount of deposits is thus greater than 2 trillion dollars. The words "Swiss bank account" became synonymous with "secret bank accounts", and although Switzerland is undoubtedly the most stable, safe, secure and beautiful place to store their money, the fact is that it is not a tax haven.
Fehrenbach, T. R. The Swiss Banks. New York: McGraw-Hill, 1966. Print.
Jeitziner, Bruno. Political Economy of the Swiss National Bank. Heidelberg: Physica-Verlag, 1999. Print.
Parker, Homer W. Swiss Bank Accounts: Investing through Swiss Banks. Round Rock, Tex.: H.W. Parker, 1989. Print.
Vincent, Isabel. Hitler's Silent Partners: Swiss Banks, Nazi Gold, and the Pursuit of Justice. New York: William Morrow, 1997. Print.
Vittas, Dimitri. Banking Systems Abroad: The Role of Large Deposit Banks in the Financial Systems of Germany, France, Italy, the Netherlands, Switzerland, Sweden, Japan and the United States. London: IBRO, 1978. Print.
R, Hans J. The Banking System of Switzerland,. 2d Rev. ed. Zürich: Buchdr. Schulthess, 1957. Print.
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