As long as Swiss financial institutions keep ending up in court, the much-vaunted Swiss banking no longer has a right to exist, writes finews.asia publisher Claude Baumann in a commentary.
With the resumption of proceedings against UBS in France, the public is once again becoming aware of what much-vaunted Swiss banking can also stand for. Namely, aiding and abetting tax evasion, money laundering, and the illegal acquisition of clients. Of course, it could be argued here that these specific incidents occurred many years ago and that the world has changed in the meantime.
Considering the US is currently investigating Swiss banks, again, for disregarding sanctions and that the Monetary Authority of Singapore (MAS) is investigating the conduct of two Swiss banks in the biggest money laundering scandal the country has probably ever experienced, the obvious conclusion is that Swiss banking has never changed. It continues to operate in a gray area between right and wrong.
Problematic Business Model
Taking into account the pending proceedings involving Archegos, Greensill, Mozambique, and Bermuda which UBS inherited from Credit Suisse, it only reinforces the suspicion that Swiss Banking may remain a highly problematic business model because it's never proven the sustainability to which its advocates refer.
The future legitimacy of Swiss banking can't be sought in the range of services offered and continuously expanded, but rather in the question of how large, internationally active Swiss financial institutions will finally manage not to constantly have at least one foot in the waters of illegality.
New Reality
In short, as long as its financial institutions regularly appear before foreign courts and are subsequently sentenced to heavy fines, Swiss banking has no long-term future. If anything, it will help other financial institutions and financial centers to expand their market share.
There's another aspect to consider. In an increasingly transparent, politically correct, and correspondingly «neo-moral» world, which has been developing as a new reality before our eyes for some years, it's becoming increasingly difficult to plausibly determine the meaning and purpose of what is ultimately a very complex and diffuse business model of Swiss banking.
Permanently in the Dock
Swiss high finance should heed the words of German philosopher Hermann Luebbe: «The courts of morality know no rules of procedure».
In this respect, the Swiss banks should do their utmost to finally stop ending up permanently in the dock. Because they only ever end up as losers there.
The cost of doing business shouldn't involve an endless stream of fines.
