Since his departure as the American ambassador in 2021, Edward T. McMullen remains closely involved in the economic relations between Switzerland and the USA. finews.asia sat down with Donald Trump's former envoy at a conference in Rüschlikon.
Before you came to Switzerland as ambassador, what was your opinion about Swiss banks?
I had been coming to Switzerland since I was a young man: My family and I had an immense respect for the Swiss business mind and that includes the banking world. Switzerland looks back at one of the oldest banking histories in the world. The entrepreneurs who started those banks increased capital for many families throughout the world over a long period of time. It is a stellar example of what is good about banking, and the Swiss understand it. I've always said, even while I was ambassador, that Swiss bankers will withstand anything anyone throws at them, because they're great at banking.
The US government’s attitude towards the Swiss financial center was very challenging for the bigger part of recent years.
When I came to Switzerland, most of the problems for the US and the Justice Department had been solved. The Swiss on their own came around for the most part to the reality that if you're facing a very aggressive IRS and a government that is determined to villainize Swiss banking, you have to find a way to take corrective action. So they did: They self-governed themselves. You don't find Swiss banks today that are conducting business that is or should be a problem for the American government.
«Americans should have more options and availability to the Swiss banking system»
It is sustainable, viable, and an amazingly strong business in all the world. Unfortunately, the US is not taking advantage of it the way it could. Americans should have more options and availability to the Swiss banking system, but our government has interceded and unfortunately gotten in the way.
Concerning this aspect: Is there a difference between Democrat and Republican administrations?
You frequently find that Republican administrations tend to be more laissez-faire while the Democrat administrations tend to attack, fine and extract resources from Swiss banks. The Republican administrations tend to recognize the viability and the importance of the capitalist markets. The Trump administration understood and respected that capitalist productivity of the Swiss that is also represented in the banking system.
How did you engage as an ambassador with the banks?
I met with most presidents of Vontobel, Credit Suisse, UBS and the likes. Sergio Ermotti became a great friend, he still is. As an ambassador, you obviously have to know them. I was able to form some very strong relationships that continue to this day. The brilliance of Swiss banking again is very important for the world’s markets.
On what foundations could you build?
It was Shelby Cullom Davis who really cultivated those relationships as ambassador under President Nixon. Then Faith Whittlesey as ambassador under President Reagan worked very closely with the banks. And Dick Frederick, who was President Clinton's ambassador, was one of the rare exceptions among the Democrats. It was more laissez-faire, more pro-business. Then we got President Obama with a very aggressive command and control approach to big government, which had some effect on our banking relationships. We worked to improve those and I think we were successful..
The combative approach hasn’t resurfaced under President Biden, a Democrat.
President Biden's administration in the last three years has been fairly reasonable on the banking system. Last spring, when the US and Switzerland were confronted with their respective banking crises, we had dialogue between the Fed and the SNB that helped to resolve the Credit Suisse issue. I think this administration has done a pretty good job of actually continuing what we were able to establish during the four years of President Trump.
So, is everything great, then?
We saw a willingness to work with Switzerland. But it has not been the priority for this administration the way it was for President Trump. He knew Switzerland well, respected it as a viable partner and investor. When I took the ambassadorship, I had the honor to be able to have a president who understood the importance of the relationship, supported me whenever I needed him: on trade, on banking, on international relations.
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Now, looking forward to the election in November, what outcome should the Swiss banking world be hoping for?
If President Trump is successful, you will have a continuation of the policies from four years ago. This is not a president who's going to fall out of Mars and all of a sudden we learn who he is. He had four great years as president, everything was moving in the right direction. And I think you'll see a continuation of that and a fantastic new team of advisors around him like Scott Bessent, who is a brilliant economist and hedge fund manager, or Hank Paulson. We would have great opportunities for continued growth and investment between our countries.
Currently, you are visiting Switzerland as Vice Chair of the American-Swiss Foundation, a NGO that specializes in bolstering the business ties between the US and Switzerland. How strong are the ties between the foundation and Swiss banking?
As strong as ever. We're very fortunate because the banking community has played a major role in supporting our Young Leaders Program. When I was a young leader in 1994, I came to Switzerland and one of my great memories was a dinner that Julius Baer hosted at a stunning townhouse. It was a beautiful dinner where a lot of experts talked about the US-Swiss banking relationship. It was the first time I had exposure to experts on that level at the age of twenty-something. Speaking of the foundation, where Markus U. Diethelm is Co-Chair of the Board: One of the great challenges for Switzerland is going to be how to survive the post-Diethelm era.
You are talking of the former General Counsel of UBS and Credit Suisse…
Yes, Markus Diethelm is one of the most highly regarded attorneys and legal minds in Switzerland. Having Markus not being in the current banking world of Switzerland is a real loss to US-Swiss banking relations because he understands America better than anyone in the legal world in Switzerland, in my experience.
«I hope Markus Diethelm gets back in the banking world»
He was a great counsel to the Swiss in understanding the U.S. perspective and concerns and he was someone who truly understood the law and worked aggressively to bring the banks together to find ways to continue the relationship between the U.S. and Swiss banking. So I think a post-Diethelm era is going to be very challenging for the Swiss. I hope Markus gets back to the banking world because he has been such an instrumental and critical part.
Ed McMullen served as Ambassador of the United States to Switzerland and Liechtenstein from November 2017 to January 2021. Ambassador McMullen is now a Senior Policy Advisor with Adams and Reese LLP, a law and public affairs firm with offices throughout the southeastern United States. He opened the firm's Charleston office to focus on economic development, foreign direct investment, and public affairs. He has also joined a private equity firm based in London. During his ambassadorship, he met with over 300 CEOs and boards of directors, fostering economic relations. Ambassador McMullen is a graduate of Hampden-Sydney College and an alumnus of the 1995 Young Leaders Conference of the American Swiss Foundation, where he was elected as Vice Chair in 2021.
