Thursday, January 22, 2015

"Risks in the Swiss Financial Center" organized by Swiss Finance Institute, Panelists: Oswald Gruebel, Daniel Zuberbühler and Prof. Dr. Martin Janssen

Around thousand participant wanted to see what Ossi Gruebel, Prof. Martin Janssen and Daniel Zuberbuehler had to say about risks in the Swsiss Financial Center. They have not been disappointed. A number of strong statements were made by all panelists. It has been both substantial and funny. In my blog post I list my favorite statements from the panelist occasionally accompanied with my own comments.   

SFI has made an excellent choice with the panelist. Although it was a small panel it united a huge expertise and experience. Ossi was brilliant as almost always and Daniel Zuberbuehler was better than I expected. Prof. Martin Janssen did a great job as moderator. He involved the former regulator and the former (and current) trader in a optimal way in the discussion.


Martin Janssen, sees 4 key risks for the Swiss Financial Center:
  • Legislation of Swiss Government
  • Regulation by FINMA
  • Swiss National Bank
  • Behavior of banks
from presentation Prof. Dr. Martin Janssen

"Risk is life, no risk is death!" Gruebel

"The leverage of banks was by far to high" Gruebel

"Today one believes only no risk is a good risk" Gruebel

"If you do not take risks you will get nowhere. Take risks! Risk is a part of our life" Gruebel

My comment: In the past, sometimes to big risk was taken. Instead of learning and avoiding these risks and only these risks, we try to avoid every single type of risk and we don't see that exactly that is the biggest risk. Looking at the Swiss leaders in banking, Boris Collardi is one of the very few who has courage to go ahead and take risks and has a forward strategy. Sadly enough he is being criticized for his acquisition strategy permanently. That Boris is a risk taker might not surprise, with Ossi he head a great teacher. When it is about new models, new trends for instance Finance 2.0, it is even worse. There to a large extent we are still in the denial phase.

A short History of Banking

"Since computers did not exist, the ones who were most skilled in calculating and ready to take risks were successful " Gruebel

"Use of computer generated more volume, but lower margins" Gruebel

"Technology killed the banking secrecy" Gruebel
My comment: I fully agree but technology/fintech has a huge potential to now save Swiss Banking Industry

Legislation and Regulation

"We already had automatic information exchange in the past in Switzerland" Gruebel
My comment: He was referring to the stolen and sold CD's ;-)

"New laws are always a source of risk, once implemented they will never ever be abolished" Gruebel

"It was said, Swiss Stamp Tax only to be in place for one year" Gruebel

"There is nothing politicians like better than saving and directing a bank"  Gruebel

"The politician who understood the Brunetti report, would have a good starting point to work from" Zuberbuehler

"FIDLEG is a failure" Zuberbuehler
My comment: It could be that Zuberbuehler said it in a bid less direct way, but that is the conclusion of his speech.

"We should focus on building national alternatives instead of re-engineering of existing Swiss laws"  Zuberbuehler
My comment: It is a kind of scary that even a former regulator has better ideas than Ms. Widmer-Schlumpf

My comment: An important conclusion from these statements is that most politicians do not really understand what is going on and how banking works. I agree on that. It as a complex field and there are only a very few politicians who understand it and take some actions which make sens. As an example, politicians discussions and statements on the gold initiative and most lately on the EUR/CHF minimum rate often were scary. But here comes the but! For this situation bankers have their blame too! The could have gone or above all could go into politics and make a change but widely the do not. When I asked Joe Ackermann, who also believes that more top bankers should be active in politics, what his concrete actions were or will be, I did not get a clear answer.  

On printing Money, the Swiss National Bank and Currencies

"You can't create a state fund with printed money and buy other countries assets. The will never ever accept this. Else Simbabwe would do it" Gruebel

My comment: This is idea was brought up in the press. I agree with Gruebel. Of course a country can have a state fund which invests in assets around the world such as Norway for example, but they get their money form oil exports and do not print it.

"The more we adapt to other countries the the weaker the Euro will become" Gruebel

"The Euro Minimum Rate has been a political decisions" Gruebel
My comment: I do share Gruebels opinion. It were the big exporters who influenced the SNB to decide to have a minimum rate and also the decision of not maintaining the minimum rate was influenced by the political environment, among others. 

"Quantitative easing will not work in Europe. We are no quantitative easing people" Gruebel

On current Situation and the Future of Swiss Banking

"We killed what we built for the last 40 years and think it is better, in our days the credo is only no risk is a good risk" Gruebel

"We should not forget, we are not the best bankers of the world, we are only among the best bankers of the world" Gruebel

"It also goes in banking, it is worthwhile to be different, with doing the same as all others one does not make money, one will not be successful" Janssen

Last but not least I asked Oswald Gruebel: "Although technology killed the Swiss banking secrecy, could not not now technology / fintech be the one that saves the Swiss Banking industry and what would you do if you would found a new bank from scratch?"

Although I have the biggest respect for Ossi Gruebel and find him a great visionary I did not expect this answer.

"Technology/fintech will kill old structures and old business and create new ones. Most have not understood that yet. Retail banking is better in Africa than in Switzerland because of technology. They did not have anything so they were not held back. Here we have our old systems who still have to be written off. Therefore important actions are not taken." Gruebel

Ossi did not answer in detail on his strategy if he was founding a new bank from scratch. It seemed he really  does not feel to found a new bank from scratch at all ... at least not together with the other panelists;-))). It is pretty obvious to me though, if he did, he would opt for digitization!

Link to Swiss Finance Insitute:


1 comment:

  1. This is good web site I like it FinfraG – Alle Details über das kommende Gesetz zum Derivatehandel: FinfraG Meldepflicht, ClearingpflichtFIDLEG Switzerland fidleg FIDLEG Reconciliation von Portfolios und rechtzeitiges Bestätigen. FinfraG (Finanzmarktinfrastrukturgesetz) oder auch auf Englisch FMIA (Financial Markets Infrastructure Act) ist ein Schweizer Gesetz zur Regulierung des Handels mit Derivaten, welches voraussichtlich im ersten Quartal des Jahres 2016 in Kraft tritt.