Plenty of Work Awaits Swiss Bankers Chairman

1. Man of Action

The choice of Herbert J. Scheidt, a German by origin, is an unexpected and smart choice as successor to Patrick Odier, who today will formally depart as chairman of the bankers association after 7 years at its helm. Smart, because the Vontobel chairman is acceptable to most exponents of the industry. He understands the problems of the private banks – with his background as chairman of Vontobel. He is no big-bank-representative, endearing him to the Swiss domestic banks, and still has an international perspective, keeping UBS and Credit Suisse on board.

Being acceptable to all and sundry won't suffice of course, what with the structural crisis engulfing the industry. The man has to display some qualities of a man of action to unite the different types of banks behind one common goal.

2. F4 – a Grand Plan With Not Much Meat on the Bone

Odier was full of grand plans towards the end of his tenure: following the decision by the U.K. to leave the European Union, he wanted to seize the opportunity to build an alliance of four financial centers – Zurich, London, Singapore and Hong Kong – the so-called F4.

The deficiencies of this grand plan are plain for all to see: the U.K. is still a member of the EU and politics demands that everybody is treading most carefully in this phase of transition. Finding the proper counterpart to further the plan will prove to be difficult.

3. Domestic Problems Aplenty

Some bankers in Switzerland are pretty miffed about the grand F4 plan. They argue that Swiss banking has enough problems to keep the bankers association busy. They have a point, with the implementation of the initiative to reduce immigration, negative interest rates and several regulatory projects in the pipeline in Bern.

Taking the eye off the domestic agenda will not pay off.

4. Rift Within the Industry

The financial crisis and its aftermath have opened up a rift between domestic and international banking. The Swiss-focused institutes are fighting regulation intended to enforce global standards with a parliamentary group in Bern. Their lobby and parliamentarians have already met on the football pitch for a friendly.

The big banks meanwhile are doing their bit in Brussels and as members of international lobby groups such as the «Group of 30».

Last but not least, the asset managers and private banks have given up on their traditional art of discretion and complain about the implementation of the negative interest rate policy by the central bank, which they say unfairly discriminates against them.

A discordant choir difficult to bring back in tune.

5. Asset Management and Fintech

The plans for the future also require some guidance from the top: making Swiss banking a leading location for asset management has been the goal of the association for five years, with few results yet. It is now looking for a head of asset management who will need to identify the issues and trends affecting the banking place Switzerland.

The second forward-looking sore point is fintech. Numerous financial-services companies and associations have founded their own incubators and innovation laboratories in recent months. The association ought to find a common denominator to foster technological progress and the creation of jobs in Switzerland.

6. Internal Agenda

Furthering the interests of the banks on the political level and enforcing an industry-friendly implementation is the association's objective. With less money to spend, the work hasn't become easier. Members have been lost due to the consolidation – and their fees went with them. The association asked McKinsey to screen the group for layers of fat that could be cut.

Making the association fitter will remain a topic for the new chairman, with a difficult market likely to reduce the number of banks – and members – further.



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