Swiss banking industry urged to adapt to new generation
Boris Collardi, the chief executive of the private bank Julius Baer, believes the Swiss banking industry must adapt to a generation of new clients for whom using the Alpine state to stash assets out of sight of tax authorities has little appeal.
The head of the third-largest bank in Switzerland and its biggest stand-alone private lender added that Swiss wealth managers must prepare for another two to three years of pain as the country's bank secrecy laws are eroded and the industry consolidates.
But Mr Collardi says younger members of the global elite will be more receptive to transparent dealings with tax authorities than the elder generation.
"High-net-worth individuals these days do not mind any more paying taxes or declaring their assets," he said. "They may still keep structures, but not for the sake of tax evasion."
As many people become more comfortable sacrificing privacy for the benefit of convenience as a consequence of wider use of the internet, private banks had further opportunities, he added.
Mr Collardi sits on the governing board of the Swiss Bankers Association, which was reported this week by the Swiss newspaper Aargauer Zeitung to have dropped its opposition to automatic information-sharing of client data with foreign tax authorities.
The shift in stance comes as developed countries have taken a hard line against tax evasion by corporations and the super-wealthy.
It is also becoming harder to maintain secrecy in the internet age. The International Consortium of Investigative Journalists last month began publishing extracts from a "trove" of 2.5 million secret files shedding light on offshore companies and trusts held by some 130,000 wealthy individuals.
The change of direction on the part of Swiss banking represented "retrospective reconciliation" to the changed regulatory environment and a "fait accompli" for those that had campaigned to close tax havens, said Richard Murphy, the research director for Tax Justice Network, a British non-governmental organisation.
What the assault on bank secrecy means for Switzerland's competitive advantage as a financial centre is uncertain.
"Secrecy as a means to avoid paying taxes is gone, but this will be replaced for Switzerland by building up on the strong level of competencies that Switzerland has as a financial centre," Mr Collardi added.