islation is established and processes assessed carefully.
Bösch confirms that his firm has experienced a ‘boost’ in
the level of regulatory work handled by the firm’s financial services team, a trend he sees continuing.
Froriep Renggli partner Catrina Luchsinger Gähwiler
notes that the uptick in this line of work for firms has
increased thanks to the demands of major financial
players. ‘Issues involving creating legally valid structures
for cross-border banking is a new factor’, and the pressure on banks does not end there. ‘Clients are at the
same time reviewing the performance of their banks
more critically, as it has not always met expectations in
the volatile markets. This has increased litigation work
against banks’. However, these institutions are increasingly being forced to react quickly to the changing
financial environment, although that drive is certainly
not holding back the domestic players. ‘We sense that,
in general, Swiss banks swiftly adapt to the evolving
regulatory environment’ says Guggenbuehl.
While increased regulation does indeed heighten the
demands on banks and other financial institutions, this
atmosphere of growing scrutiny does not detract from
the market itself. While Beat von Rechenberg, partner at
CMS von Erlach Henrici explains that there has been an
increase in legislation, and some ‘hard regulation’ for
the Swiss banks, ‘it's good for confidence levels in the
jurisdiction. More regulation also means more work for
the attorneys, although it's not such a positive for the
economy or the Swiss people’. Importantly, it doesn't
put off investors, and von Rechenberg notes that ‘there
is a continuous stream of new money coming in’.
Switzerland's financial services industry has long-
standing strong links with other financial centres glob-
ally, and with recent announcements from a number of
US banks intending to increase their presence in
Switzerland, this is set to continue. ‘Banks have been
and will remain for the foreseeable future key-players in
the market’ asserts Bösch. Currently the financial servic-
es industry accounts for approximately 15% of GDP.
‘Moreover, we still see Switzerland’s increasing attrac-
tiveness as a market for private banking and we do
believe that this trend will be ongoing. The modern
financial services industry is predominantly internation-
al and not really centred on one single market’ he adds.
Historically, Switzerland has been considered the go-to
market for high-net-worth individuals. However, this
image has been affected somewhat by the recent
debate over the transparency of banking protectionism.
However, the scrutiny has at least in part stemmed from
the effects of the crisis coupled with heightened regulatory developments, and many believe the hype has
been overplayed. While Switzerland did abolish barriers
for the provision of mutual assistance in relation to tax
evasion, Swiss banking secrecy laws do continue to protect the privacy of investors outside of any evasive or
fraud schemes. ‘We believe’ says Bösch, ‘that most of
the recent developments in relation to banking secrecy
were misunderstood by or overstated in the media.
Switzerland is still very attractive for private clients, still
maintaining an extremely high level of professional
services as well as a significant protection of privacy,
coupled with political and economic stability’.
Despite these debatable setbacks, Switzerland’s well-established reputation does precede it, and the challenges felt by the financial institutions here are by no
means confined to the Swiss market. In fact Favalli
claims that there has in fact been a swell in the influx of
Swiss private client work. ‘The challenges to the banks
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