Switzerland celebrates its national holiday this Thursday, August 1st. Internationally, Switzerland is recognized for its fabulous alpine landscapes, a relatively exemplary democratic system (in the current context), the quality of its watchmaking industry, its cheeses, its (milk) chocolate, and of course, its banks. The Swiss banking sector is part of our national heritage, for better (often) or worse (sometimes).
The history of this vital economic sector for our country is rich with a complex story marked by numerous successes (major but discreet, naturally) and a few resounding failures. For over 150 years, Swiss banks have continually transformed to adapt to the major changes and strategic innovations that have shaped our national and international economies.
The modern history of banking in Switzerland began in 1856 with the founding of the Schweizerische Kreditanstalt (SKA) by Alfred Escher, an institution that would later become Credit Suisse. This bank played a crucial role in the economic development of the country, mainly by financing the construction of Swiss railways, thus facilitating the rapid modernization of the Confederation. However, by 1860, SKA went through a turbulent period marked by significant financial losses and major strategic challenges, leading to a rigorous restructuring that tested its ability to overcome crises and adapt to economic changes. The beginning of the 20th century saw a new phase of growth for SKA with the opening of several branches across Switzerland in 1905, thereby strengthening its national presence and improving its customer service.
Between the late 19th century and the onset of World War I, the Swiss banking landscape underwent a profound transformation. Two key political measures facilitated this evolution: the Confederation's acquisition of the main private railway companies starting in 1898, and the creation of the Swiss National Bank in 1907. These initiatives created a favourable environment for the rise of major commercial banks.
During this period, and thanks to an excellent railway network, Switzerland became a popular destination for luxury tourism. The European aristocracy flocked to Switzerland to enjoy wellness and convalescence stays. The breathtaking landscapes, tranquillity, and Alpine air were all compelling arguments that caused a boom in tourism. It was during this time that Jacques Tschumi founded the École hôtelière de Lausanne in 1893 to meet this demand in a structured and professional manner, contributing to making the shores of Lake Geneva a centre of attraction for wealthy Europeans. Switzerland then became synonymous with excellence, and a service economy began to emerge.
The Swiss banking system is composed of the National Bank, state-owned cantonal banks, large banks, regional savings banks, and private banks. This diverse network serves as a significant employer both within Switzerland and abroad. Cities like Zurich, Geneva, Basel, and Lugano stand out as leading global financial centres.
Several factors explain the success of the Swiss financial sector: business-friendly legislation, confidentiality, a highly skilled workforce, and attractive tax rates. Moreover, Switzerland's neutrality has provided valuable stability during global conflicts, allowing the country to become a major centre for wealth management and capital investment.
Research into Switzerland's financial and banking history has intensified over the past three decades. The role of the Swiss financial sector between the 1930s and 1950s has received particular attention, mostly from the Independent Commission of Experts Switzerland – Second World War (ICE). The documents produced by this commission are now accessible at the Swiss Federal Archives, offering a valuable resource for studying this complex period.
Since the 1990s, Switzerland has faced increasing international pressure regarding its banking secrecy and tax legislation. The country has been criticized for attracting illicit funds, facilitating tax evasion, and allowing investments in countries with controversial regimes, such as apartheid-era South Africa.
These pressures have prompted the industry to reevaluate and radically transform its regulatory framework to combat money laundering more effectively. The first Agreement on the Swiss Banks' Code of Conduct about the exercise of due diligence (CDB) was introduced in 1977 and is typically revised every five years. Regarding fiscal banking secrecy, Swiss banks have implemented the automatic exchange of information with over a hundred countries and jurisdictions since 2017, including G20 and OECD member states.
Alongside this regulatory transformation, Swiss banks have strived to reinvent themselves, focusing on innovation, value creation, transparency, and excellence in services such as custodial banking, wealth advisory, financing, and asset management.
Today, the Swiss banking industry is the global leader in cross-border wealth management: assets under management by Swiss banks amount to approximately CHF 8 trillion, with about half coming from abroad. Switzerland is home to 235 banks, representing a highly rich and diverse ecosystem of local, cantonal, national, and international actors. Banks (and insurance companies) remain one of the pillars of the Swiss economy, together generating nearly 9% of the gross domestic product and employing approximately 218,000 full-time equivalent employees. The financial sector continues to export its excellence and expertise worldwide, accounting for about 20% of Swiss service exports.
Piguet Galland is deeply rooted in the Swiss banking history. It emerged from the merger of three banks in the French-speaking region of Switzerland: Banque Piguet, established in 1856 in Yverdon-les-Bains, Banque Galland, founded in 1889 in Lausanne, and Banque Franck, launched in 1965 in Geneva. Collectively, these institutions represent 168 years of history during which we have strived to contribute to the success and peace of mind of our clients, entrepreneurs, and families who have placed their trust in us.
In a complex and volatile world that sometimes requires reinvention, we stand by our clients, by your side, to continue creating value and supporting you in realizing the projects that matter to you.