ZURICH, Sept 12 (Askume) – A survey of Swiss banks shows that international sanctions imposed on other countries, such as those imposed on Russia over Ukraine, are the biggest geopolitical risk to their operations.
Swiss policymakers should develop restrictions to ensure that neutral Switzerland remains a safe haven for banks and their clients, the Swiss Bankers Association (SBA) and consultancy Zeb said in a report released on Thursday.
Of the 34 risks in the report, the risk of war between Russia and Ukraine and the US debt crisis ranked high.
Shortly after Russia invaded Ukraine in 2022, Switzerland decided to impose EU sanctions on Moscow. One of the measures is to seize assets belonging to sanctioned Russians.
August Bentz, deputy director of the Small Business Administration, expressed concern about Switzerland’s quick move to impose a ban.
“Many sanctions do not always have the desired effect,” Bentz told Askume. “Sometimes they have the opposite effect than expected.”
“Switzerland will have to look at whether it needs to develop its own sanctions policy.”
The Swiss economy ministry said that as of mid-August, the value of frozen Russian financial assets, real estate, luxury cars and art was 7.1 billion Swiss francs ($8.33 billion).
Bankers say Switzerland’s outspoken stance on the war in Ukraine has raised concerns among foreign clients that the country could support Western sanctions in the future.
The research, based on discussions with senior bankers and analysis of documents powered by artificial intelligence, said concerns over Switzerland’s commitment to neutrality could prompt clients to withdraw assets to the so-called Southern Hemisphere.
SNB President Thomas Jordan said at a banking event in Geneva that restrictions would be a concern if markets suddenly became inaccessible for geopolitical reasons.
“This situation creates major challenges for the financial industry,” Jordan said.
The authors of the report acknowledge the impact of sanctions on the international wealth management business.
“The flow of money from some countries to Switzerland has declined in recent years,” said Norman Carrer, managing partner of Zeb Switzerland.
(1 USD = 0.8527 Swiss Francs)
