The Republic and Switzerland will still be attractive private banking centres
By SIOW LI SEN 26 March 2009
Singapore and Switzerland will remain attractive private banking centres - despite the end of banking secrecy - because they offer safety and freedom of movement for clients’ money, say Swiss bankers from Lombard Odier Darier Hentsch (LODH).
History has shown that during banking crises, some countries resort to devaluation and currency controls to prevent capital flight, they point out.
‘I may not be politically correct to say this (but) it’s not about privacy and taxation - the problem is that some big Anglo-Saxon countries need to pay the bills because of the banking mess,’ said LODH partner Jean de Haller.
The only people with money are savers, and these are hard-working people whose savings are legitimate, said Mr. de Haller, who is in charge of the bank’s Asia business.
Singapore and Switzerland offer freedom to savers on how they want to invest their money, he said. Other governments ‘want to put pressure on their savers - to frighten them not to put money in Singapore and Switzerland’.
Singapore will amend its tax laws by mid-year as it has decided to endorse the Organisation for Economic Cooperation and Development’s standard for the effective exchange of information through avoidance of Double Taxation Agreements. Switzerland, too, has agreed to relax its banking secrecy laws so tax evasion becomes a crime.
Some Swiss bankers are in an uproar as they fear their industry could be savaged by the loss of secrecy.
Without banking secrecy, ‘the financial centre would shrink by up to half of its current size’, Ivan Pictet, a private banker who heads the Geneva Financial Centre bank association, said in a report last month.
But LODH managing partner Pierre Darier dismisses such talk. ‘I’m not worried,’ he said.
Mr. Darier, a member of the board of the Swiss National Bank in 1992-2004 and chairman of the Swiss Private Bankers Association in 2005-2008, feels his government backed down under threat.
He also insists that exchanging information with other governments does not mean the end of secrecy or privacy.
It’s not about paying taxes but the ability to invest one’s money freely and without fear of currency controls, he said. ‘The day your dollar is checked, you’ve lost your liberty.’
Both bankers insist that Swiss private banks will continue to attract clients. ‘Our successful business model is not dependent on banking secrecy,’ Mr. de Haller said. ‘Clients come to us for our international experience.’
LODH opened its Singapore office 12 months ago and is on target to amass US$2 billion of assets by next year, despite the global crisis, he said.
The two bankers are confident that the destruction of wealth will lure many rich people back to traditional Swiss private banks that focus on wealth preservation. They say the aggressive tactics of some of the big global banks, which hired private bankers by the hundreds, who then had to sell products to earn fees, were predicated on the premise that economies never fail. ‘You hire people by the hundreds, you launch them at the clients - you call it private banking,’ said Mr. Darier.
Last year, LODH reported a net inflow of seven billion Swiss francs (S$9.4 billion). Assets under management in 2008 fell 21 per cent to 127 billion Swiss francs.
1 comment:
Loss of secrecy won’t hurt banks in Singapore
The Republic and Switzerland will still be attractive private banking centres
By SIOW LI SEN
26 March 2009
Singapore and Switzerland will remain attractive private banking centres - despite the end of banking secrecy - because they offer safety and freedom of movement for clients’ money, say Swiss bankers from Lombard Odier Darier Hentsch (LODH).
History has shown that during banking crises, some countries resort to devaluation and currency controls to prevent capital flight, they point out.
‘I may not be politically correct to say this (but) it’s not about privacy and taxation - the problem is that some big Anglo-Saxon countries need to pay the bills because of the banking mess,’ said LODH partner Jean de Haller.
The only people with money are savers, and these are hard-working people whose savings are legitimate, said Mr. de Haller, who is in charge of the bank’s Asia business.
Singapore and Switzerland offer freedom to savers on how they want to invest their money, he said. Other governments ‘want to put pressure on their savers - to frighten them not to put money in Singapore and Switzerland’.
Singapore will amend its tax laws by mid-year as it has decided to endorse the Organisation for Economic Cooperation and Development’s standard for the effective exchange of information through avoidance of Double Taxation Agreements. Switzerland, too, has agreed to relax its banking secrecy laws so tax evasion becomes a crime.
Some Swiss bankers are in an uproar as they fear their industry could be savaged by the loss of secrecy.
Without banking secrecy, ‘the financial centre would shrink by up to half of its current size’, Ivan Pictet, a private banker who heads the Geneva Financial Centre bank association, said in a report last month.
But LODH managing partner Pierre Darier dismisses such talk. ‘I’m not worried,’ he said.
Mr. Darier, a member of the board of the Swiss National Bank in 1992-2004 and chairman of the Swiss Private Bankers Association in 2005-2008, feels his government backed down under threat.
He also insists that exchanging information with other governments does not mean the end of secrecy or privacy.
It’s not about paying taxes but the ability to invest one’s money freely and without fear of currency controls, he said. ‘The day your dollar is checked, you’ve lost your liberty.’
Both bankers insist that Swiss private banks will continue to attract clients. ‘Our successful business model is not dependent on banking secrecy,’ Mr. de Haller said. ‘Clients come to us for our international experience.’
LODH opened its Singapore office 12 months ago and is on target to amass US$2 billion of assets by next year, despite the global crisis, he said.
The two bankers are confident that the destruction of wealth will lure many rich people back to traditional Swiss private banks that focus on wealth preservation. They say the aggressive tactics of some of the big global banks, which hired private bankers by the hundreds, who then had to sell products to earn fees, were predicated on the premise that economies never fail. ‘You hire people by the hundreds, you launch them at the clients - you call it private banking,’ said Mr. Darier.
Last year, LODH reported a net inflow of seven billion Swiss francs (S$9.4 billion). Assets under management in 2008 fell 21 per cent to 127 billion Swiss francs.
Post a Comment