The Swiss financial market is actively pursuing its quest for a share of the trade in the Chinese currency renminbi. Switzerland may soon be rewarded for its effort.
In September, finews.ch reported that the Chinese decision how to engage with the Swiss financial market hinged on the decision by Finma, the Swiss regulator, about the application for a banking licence in Switzerland.
A high-powered delegation of regulators, central bank and market representatives visited the Chinese capital at the start of September to champion the case for a Swiss trading hub for renminbi.
Key Decision
The hub now seems to be on track, according to a report by «Bloomberg News». The People's Republic's central bank is considering a direct trading link between the country's renminbi currency and the Swiss franc, according to the report, which was based on information from several unidentified sources.
The decision may be largely symbolic, but shows the commitment of the People's Bank of China open the trade of its currency internationally. For Switzerland, the move is a sign that the currency trading hub is now within reach, that a the country may get a transaction platform for the Chinese currency, which until today is not freely convertible.
Access for Chinese
Should the hub materialize, business with China will become much easier for Swiss companies. At the same time, the hub would probably prompt the financial market to develop new products.
The implementation is closely linked with the access of Chinese banks to the Swiss market, as the finews.ch story in September showed. The expectations both in Switzerland and China are pretty high, putting pressure on Finma to deliver its verdict swiftly.
