The Swiss banking system is one of the prominent in the world. Its reputation is based on the political and economic stability of Switzerland and the confidentiality of Swiss banking. Although critics argue that such a system favors money laundering and tax evasion.
To counteract this bad reputation, Switzerland adopted anti-money laundering laws in 1998. The banking industry is part of the financial industry’s most important economic sector in Switzerland and contributes significant amount to its gross domestic product.
Even though Switzerland is not generally considered a tax haven, thousands of people choose to live in Switzerland for tax benefit package paid in lieu of taxes on ordinary income and capital, calculated on the expenditure of taxpayer.
In practice, the Swiss Government considers that this package must be at least five times the annual rent of the taxable person or the rental value of housing under its enjoyment. Persons receiving a lump-sum taxation can not work and therefore collect a fee in Switzerland.
All institutions are regulated by FINMA, Federal Supervisory Authority for Financial Markets. FINMA takes the form of a public institution and is subject to the supervision policy of the Confederation. In addition, an ombudsman, a position created in 1993, offers free services, including mediation and assistance to people looking for dormant accounts.
The two big banks, UBS and Credit Suisse are the largest banking groups in Switzerland and are among the largest in the world. They stand out as global universal banks. Even in the domestic retail banking Switzerland is potent, although regional banks in particular have a higher market share.
Over time, both UBS and Credit Suisse acquired quite a number of traditional banks and reorganized and incorporated their own companies into specialized units.
The Swiss banks can be roughly divided into six groups, there is the leading banks, cooperative banks, cantonal banks, regional banks, savings banks. Another bank which has found its own place in the industry is PostFinance, although it has no banking license, as a division of Swiss Post, it still holds a very strong position in retail banking.
Several independent regional banks and savings banks joined forces to form a group, the RBA Group. The fifty-one affiliated regional banks, although legally independent, are shareholders of the RBA-Holding AG. The area of operation of the regional banks is also traditionally in the local retail banking.
The branches of foreign banks are economically and legally not separate legal entities in Switzerland, but are subordinate to their parent companies. The foreign-controlled banks are mainly involved in asset management and investment banking and have their seats, especially in Zurich or Geneva, where they play an important role in the financial hub of Switzerland.