By Oliver Hirt
ZURICH (Reuters) -A survey of Swiss banks has highlighted international sanctions imposed on other countries, such as against Russia over Ukraine, as the greatest geopolitical risk to their business.
The report by the Swiss Bankers Association (SBA) and consultants zeb said on Thursday that Swiss policymakers should develop an approach to sanctions that ensures neutral Switzerland remains a safe haven for banks and their customers.
Also high on the list of 34 risks in the report is the war between Russia and Ukraine and the risk of a U.S. debt crisis.
Shortly after Russia’s 2022 invasion of Ukraine, Switzerland decided to adopt EU sanctions against Moscow. One measure was to freeze assets belonging to sanctioned Russians.
August Benz, deputy head of the SBA, raised concerns about Switzerland’s rapid adoption of sanctions.
“Many sanctions don’t always have the desired effects,” Benz told Reuters. “They sometimes even have the opposite effect of what was intended.
“Switzerland must examine if it needs to have its own sanctions policy.”
The Swiss economy ministry said that as of mid-August, the value of frozen Russian financial assets, real estate, luxury vehicles and works of art was 7.1 billion Swiss francs ($8.33 billion).
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According to bankers, Switzerland’s clear stance on the Ukraine war has raised fears among foreign customers that it could support further Western sanctions in the future.
Concern over Swiss commitment to neutrality could prompt clients from the so-called global south to withdraw assets, said the study, which was based on discussions with senior bankers and an AI-supported document analysis.
Swiss National Bank Chairman Thomas Jordan told a banking event in Geneva that sanctions were a worry if markets suddenly became inaccessible due to geopolitics.
“Such a situation creates big challenges for the finance sector,” Jordan said.
The report’s authors acknowledged the impact of sanctions on the international wealth management business.
“Less money has flowed into Switzerland from some countries in recent years,” said Norman Karrer, managing partner at zeb Switzerland, adding: “Not all clients from all countries are equally positive about Switzerland anymore”.
($1 = 0.8527 Swiss francs)
(Reporting by Oliver Hirt, additional reporting byh Emma Farge in Geneva, writing by Dave Graham and John Revill, editing by Alexander Smith, Alexandra Hudson)
