The next few months will decide the future of entire sectors of Switzerland’s financial industry. Here are some of the most pressing issues if faces. Once again, Credit Suisse and UBS are in the spotlight.
1. A Criminal Trial to Start Off
After numerous delays the criminal trial against the former head of Raiffeisen Switzerland Pierin Vincenz, is set to go ahead at the end of January.
Vincenz and his former business partner Beat Stocker, and four other defendants will face accusations brought forward by the Zurich public prosecutor's office of offenses in connection to acquisitions related to Raiffeisen Switzerland and payment specialist Aduno (now Viseca).
Vincenz and ex-Aduno CEO Stocker spent more than three months in pre-trial detention following criminal charges filed by Aduno and Raiffeisen in 2018. All defendants are presumed innocent.
2. It's me, Ralph
«It's me, Ralph,» as UBS' Dutch CEO Ralph Hamers likes to introduce himself in staff video messages. Since joining the bank at the end of 2020, he has skirted radical changes at Switzerland's largest banking institution and has mainly kept behind the scenes - favorite topics of his are agile working and the deeper purpose of the company.
At the beginning of next month however, the Dutchman is expected to present a concrete strategy. Expectations are particularly high for UBS' digital transformation which was the main reason Hamers was hired.
At the same Hamers is awaiting findings by the public prosecutor's office in the Netherlands, which has opened a preliminary investigation in connection to money laundering incidents at ING, the bank he previously ran.
3. Credit Suisse's Top Tier
Both Credit Suisse CEO Thomas Gottstein and new Chairman António Horta-Osório are marked: the latter for violating Corona regulations twice since last summer - which has now become subject of an internal investigation,- while the former could be in danger from new revelations realted to the now-defunct Greensill funds, which imploded under his watch.
Findings of another internal investigation could be published in the first quarter of 2022; the report has already drawn high-level dismissals at the bank.
The Swiss Financial Market Supervisory Authority's conclusion from the investigations into the multibillion-dollar losses from New York-based Archegos, as well as into the Credit Suisse's Greensill funds is also expected.
4. United Against Hackers
With the digitalization push triggered by the Corona crisis, cyber attacks on financial institutions have also reached a new level of intensity.
Hackers are now taking advantage of financial professionals working from home with much less IT protection. Marcel Rohner, the new chair of the Swiss Bankers Association (SBA), has issued an urgent warning against attacks on Swiss financial institutions and called on the federal government to help.
5. Greenwashers Threatened
Investments that take into account factors such as the environment, society and good governance (ESG) are also big business in Switzerland. According to current estimates, the local market for sustainable financial products has grown more than sevenfold in the last five years to 1.52 trillion Swiss francs (USD 1,6 trillion).
However, the emerging industry lacks standards, making it difficult for investors to separate the wheat from the chaff.
Accusations of labeling fraud, so-called greenwashing, have increased with potentially fatal consequences for the banking center which aims to distinguish itself as a global hub for sustainable finance.
Research by finews.com shows that the industry has only a few months left to avoid new federal regulations by quickly applying effective self-regulation.
6. Switzerland-UK Axis
With Brexit «the City» of London is experiencing market access to clients being blocked in the EU by various hurdles. A feeling Switzerland knows all too well.
Overcoming the hurdles is best achieved bilaterally - country by country. Closer cooperation between the British and Swiss financial centers is now taking shape following the «F4» format.
The Swiss Banking Association’s chair Rohner, recently said «I am confident that an agreement will be reached in 2022.»
While the two rival European financial centers are moving closer together, the breakdown in 2019 in negotiations to reach a framework agreement between Switzerland and the EU has led to a standstill between the two parties.
The impasse directly affected the Swiss stock exchange operator SIX, which was stripped of stock exchange equivalence and access to the European market. Protective measures by the Swiss government for trading in Swiss shares expired at the end of 2021 and must now be extended.
On March 4, the Swiss parliament will decide on an extension to a maximum of five years.
7. End-Of-Year Deadline for Independent Asset Managers
By the end of 2022, some 2,400 independent asset managers in Switzerland must have submitted a license application to the Swiss Financial Market Supervisory Authority (Finma) and become subject to an approved supervisory organization.
The procedure to submit the application for a license can easily take three quarters of a year. With a bottleneck emerging at the beginning of 2022 already, it looks very much as if the deadline will be extended.
