Banking in Switzerland

All banks in Switzerland are regulated by Swiss Financial Market Supervisory Authority (FINMA), which derives its authority from a series of federal statutes. The country's tradition of bank secrecy, which dates to the Middle Ages, was first codified in a 1934 law. Switzerland is a prosperous nation with a per capita gross domestic product higher than that of most western European nations. In addition, the value of the Swiss franc (CHF) has been relatively stable compared with that of other currencies. In 2009, the financial sector comprised 11.6% of Switzerland's GDP and employed approximately 195,000 people (136,000 of whom work in the banking sector); this represents about 5.6% of the total Swiss workforce. Furthermore, Swiss banks employ an estimated 103,000 people abroad. Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector was able to develop and thrive. Switzerland has maintained neutrality through both World Wars, is not a member of the European Union, and was not even a member of the United Nations until 2002. Currently an estimated one-third of all funds held outside the country of origin (sometimes called "offshore" funds) are kept in Switzerland. In 2001 Swiss banks managed US$2.6 trillion. Bank for International Settlements (BIS) The Bank of International Settlements, an organization that facilitates cooperation among the world's central banks, is headquartered in the city of Basel. Founded in 1930, the BIS chose to locate in Switzerland because of the country's neutrality, which was important to an organization founded by countries that had been on both sides of World War I.

The BIS was founded in 1930. It fosters(encourage to develop) international monetary and financial cooperation. The BIS maintains the secretariat for various committees and groups of experts. As a bank for central banks, it manages the foreign exchange reserves of numerous countries and international financial institutions. Moreover, it grants bilateral monetary assistance loans and acts as counterparty for central banks in their financial transactions.
Foreign banks operating in Switzerland manage 870 billion Swiss francs worth of assets (as of May 2006). The Swiss Financial Market Supervisory Authority (FINMA) is a public law institution that supervises most banking-related activities as well as securities markets and investment funds.

Banking Law of 1934

The aim of the Swiss Banking Law (Federal Law on Banks and Savings Banks) is to protect creditors and to strengthen the Swiss financial centre. It sets out rules on authorisation for the commencement of banking activities, on the banking activities themselves and on the presentation of accounts. It also stipulates that the audits required under banking law should be conducted by private auditors and defines the Swiss Financial Market Supervisory Authority (FINMA) as being responsible for supervising the banks.

UBS
UBS came into existence in June 1998, when Union Bank of Switzerland, founded in 1862, and Swiss Bank Corporation, founded in 1872, merged. Headquartered in Zurich and Basel, it is Switzerland's largest bank. It maintains seven main offices around the world (four in the United States and one each in London, Tokyo, and Hong Kong) and branches on five continents.
As of 2010, UBS had a net profit of CHF 7.161 billion, a market capitalization of over CHF 58.8 billion, and 64,617 employees.

Credit Suisse
Credit Suisse is the second-largest Swiss bank. Based in Zurich, it was founded in 1856; its market capitalization (as of 2007) is $95.2 billion, and the company has about 40,000 employees. Credit Suisse Group offers private banking, investment banking and asset management services.

Central Bank
The Swiss National Bank (SNB) serves as the country's central bank. Founded by the Federal Act on the Swiss National Bank (16 January 1906), it began conducting business on 20 June 1907. Its shares are publicly traded, and are held by the cantons(The 26 cantons of Switzerland are the member states of the federal state of
Switzerland. Each canton was a fully sovereign state with its own borders, army and currency from the Treaty of Westphalia (1648)

cantonal banks, and individual investors; the federal government does not hold any shares. Although a central bank often has regulatory authority over the country's banking system, the SNB does not; regulation is solely the role of the Federal Banking Commission.
until the establishment of the Swiss federal state in 1848.),

Private banks Private bankers

The term private bank refers to a bank that offers private banking services and in its legal form is a partnership. The first private banks were created in St. Gallen in the mid 18th century and in Geneva in the late 18th century as partnerships. In Switzerland, such private banks are called private bankers (a protected term) to distinguish them from the other private banks which are typically shared corporations. Open account :Francs 250,000 for private investors.

Cantonal banks
There are, as of 2006, 24 cantonal banks; these banks are state-guaranteed semi-governmental organizations controlled by one of Switzerland's 26 cantons that engage in all banking businesses. The largest cantonal bank, the Zurich Cantonal Bank, had a 2005 net income of CHF 810 million.

Banking privacy
Swiss bank secrecy does protect the privacy of bank clients; the protections afforded under Swiss law are similar to confidentiality protections between doctors and patients or lawyers and their clients. The Swiss government views the right to privacy as a fundamental principle that should be protected by all democratic countries. While privacy is protected, in practice all bank accounts are linked to an identified individual. Moreover, the bank secrecy is not absolute: a prosecutor or judge may issue a "lifting order" in order to grant law enforcement access to information relevant to a criminal investigation.

Taxation Swiss law distinguishes between tax evasion (non-reporting of income) and tax fraud (active deception). International legal assistance used to be granted only with respect to tax fraud. Under pressure from the OECD(Organization for Economic Cooperation and Development (an organization of industrial countries that encourages trade and economic growth)) and the G20(este un forum creat n 1999, dup crizele din Asia i Rusia, pentru a reuni economiile dezvoltate i marile economii emergente ), the Swiss government decided in March 2009 to abolish the distinction between tax evasion and tax fraud in dealings with foreign clients.

European Union
Switzerland 1800 Illegal currency from EU 880 ,legal 120 other countries (legal and Illegal)1200
INFO .Swiss Capital Market in billion CHF, Data from a KPMG(one of the largest professional services networks in the world) and Helvea Study

Pressure on Switzerland has been applied by several states and international organizations attempting to alter the Swiss privacy policy. The European Union, has complained about member states' nationals using Swiss banks to avoid taxation in their home countries. The EU has long sought a harmonized tax regime among its member states, although many Swiss banking are resisting (refuse) any such changes. Since July 1, 2005, Switzerland has charged a withholding tax on all interest earned in the personal Swiss accounts of European Union residents.Switzerland is not a member of the European Union but, since December 2008, is a part of the Schengen agreement. .Swiss bank accounts cannot be opened without the holder signing a legal document asserting that they have no outstanding financial obligations to the IRS(Internal Revenue Service). Despite this, Swiss banks have been criticized for improperly(wrong) shielding(protect from) tax evaders.

Numbered bank accounts

Some bank accounts are afforded an extra degree of privacy. Information concerning such accounts, known as numbered accounts, is restricted to senior bank officers, rather than being accessible to all the employees of a bank. However, the information required to open such an account is no different from that of an ordinary account; completely anonymous accounts are not allowed by law. Should a criminal investigation take place, law enforcement has access to information related to a numbered account in the same way it has access to information about any other account.

Allegations of black money

Swiss Banks are alleged to stash black money i.e. as that part of a nation's income or that a person or organization acquires illegally and concealed, by reporters and journals, and reportedly there are more Indian and Pakistani deposits in the Swiss banks than any other nationality.

International competition
With recent changes in the Swiss bank secrecy regime the assets held by foreign persons in Swiss bank accounts declined according to data by the Swiss National Bank (SNB) by 28.1% between January 2008 and November 2009.Other states, such as Singapore, have attracted depositors seeking privacy and protection. Having taken steps to make its banks more attractive, Singapore strengthened penalties for violators of bank secrecy (and now imposes steeper fines and longer jail sentences for offenders), and modified its laws on trusts and inheritance. Singapore is also now the location of Credit Suisse's international banking headquarters. Swiss banks, as well as the post office (which handles some financial transactions) use an electronic payments system known as Swiss Interbank Clearing (SIC). The system is supervised by the Swiss National Bank and is operated via a joint venture. SIC handled over 250 million transactions in 2005, with a turnover value of 41 trillion Swiss francs.