GUEST The automatic exchange should make it easier for foreigners to open accounts in Switzerland. But the
degradation of the framework conditions is such that holding an account in Switzerland is often a matter of racing
obstacles
Private banking is an area where major political and diplomatic transformation projects are
completed or in the process of being completed. Large-scale automatic exchange of information (AEOI) began in
2018 and it would seem as normal to have an account in Switzerland as to have one in France, in Germany
or in Italy, at least in theory. Even a Russian, Chinese or Brazilian customer could tomorrow have his
assets with us without any hassle other than that of registering with your tax authority.
Some consultants in banking and other stock market professionals expected
so that net new money [net capital inflows] or even the cost-income ratio [ratio between
costs and revenues] of management banks improves considerably as soon as the effective implementation of
this paradigm shift.
These same commentators change their tone today and say they are disappointed with the overall performance
private banks, especially those on a human scale. Ten years after the abandonment of banking secrecy in
tax matters, we are surprised by the fact that some of these institutes in Switzerland are struggling to attract new
customers to compensate those they would lose, besides that they are unable to reduce their costs. Experts
even find that the branch would depend too much on the stock market trend and that it would struggle to adapt
to the structural changes induced by the taxation of customers.
Penalizing conditions
It is true that the financial center as a whole has given rise to this belief among the public that everything will
for the better after the effective implementation of the EAR. Indeed, the framework conditions for the management of
cross-border fortunes are so degraded that it could not be so. Moreover, in such a context,
our banks do not deserve to be criticized on their performance (apart from the fact that most of them
remain prosperous!).
The fact is that market access to most countries in the world from Switzerland remains at best
extremely difficult, at worst impossible. As experienced as he is in multi-market management,
multi-currency and multi-product, the Swiss asset manager risks a prison sentence if he approaches
prospects, particularly in France or, locally, in Brazil.
Beyond the numbers and statistics taken from the banks' annual reports, this is the sad reality. Those
impediments to wealth management from Switzerland are also of a fiscal nature and, in certain cases, the
actions taken are so disproportionate that one can legitimately wonder whether the boycott of our place
finance was not the primary intention of our 'partners' in the OECD.
Double taxes and paperwork
Let us judge by these two examples among many others: Belgian customers are still subject to a tax
of stock exchange which duplicates the Swiss federal stamp, since it is extended to all operations
carried out abroad. The Spaniards, meanwhile, have a continuing obligation to complete up to seven reports
for the annual tax declaration of their account in Switzerland!

In emerging countries, the situation is the same, although more contrasted. Their tax laws or
exchange controls persist in introducing differences in treatment, both according to the origin of the
movable income of their resident taxpayers depending on the service provider (the local bank or
foreign) who pays them the said income.
In other words, a Brazilian, Chinese or Russian customer does not have direct access from Switzerland to products
authorized in its domestic market, respectively to those who are taxed cheaply there. It takes at best
go through a broker or a local bank to process, or even request authorization from the central bank
when it comes to China or even Russia.
Such differentiated regimes are, of course, likely to impact the expected profitability of investment strategies.
placement offered from our country, and constitute as many protectionist obstacles as our
diplomacy struggles to get up, sometimes successfully. From January 1, 2020, Russian residents will be able to
do everything on their private accounts in Switzerland without limitation - sell any securities, receive
loans, trade in structured products or derivatives.
There will now be only one limit: the bank account must be in a Member State of
the OECD/FATF which does exchange information with Russia. This will be the case for Switzerland,
since the Federal Council has recently decided that Russia fulfills the conditions set out in the standard
on the EAR for the effective exchange of data in September 2019, in the same way as Brazil and the
China. Being in the "small papers" of the OECD or the FATF can therefore also be good and we bet that
this clientele from emerging countries can invest from our country under conditions acceptable to
the future.
Revise expectations
Under these conditions, having too high expectations of growth or profitability that any
business model pursued from Switzerland can achieve seems to us to be misleading. The fact that
our financial center is still valiant after what has been inflicted on it is already remarkable in itself; that
confirms its ability to withstand crises and adapt.
For management banks struggling to find growth drivers, or even losing money,
let's start by providing them with "framework conditions" worthy of the name for doing business, between
urgent reform of withholding tax, abolition of stamp duty, mitigation of the impact of negative rates
and codification of the trust in our legislation, to name but a few of the initiatives on which the
Federal Bern has taken over again. Failing this, there is a risk that private banks or managers
"reinvent" in a trivial way by setting up or merging elsewhere.