Geneva this spring seems positively balmy compared with last year. And that is the impression that its private banks are trying to get over too.
Under pressure over its sacred bank secrecy, Swiss private banks – mostly based here around Lac Léman – initially looked like headless chickens. It is economic war from the US, one said. For another, the Germans were threatening the country again. Yet more started to ban employees from travelling even to France – just a few kilometres away. Paranoia reigned.
That mood has subsided. The banks themselves are very keen to say it is business as usual. In the walnut-panelled rooms in which they entertain the rich widows and foreigners fleeing lands in turmoil, senior bankers told me how a little less bank secrecy wouldn’t hurt them. Quality service (“not wearing white socks” as a consultant told me) coupled with tradition should serve Switzerland well against upstarts such as Singapore.
I’m not so convinced. A person I spoke to with deep connections to several banks in the industry says the industry is still in denial. It reminded me of a banker saying last year that Geneva’s banks were going through the classic stages of grief. According to the industry source, many banks are still hiding their heads in the sand hoping the problem will go away. Instead, the likely result is that profits will gradually fall as competition increases and jumpy customers worried about their identities being revealed look elsewhere.
Geneva’s private banks aren’t going to disappear any time soon. Indeed, as the head of one of the bigger banks told me, the private bank part of their business is likely to become less important while the investment side gains in significance. But the outlook for them still seems more like the cloudy sky I flew out into rather than the bright blue one I flew into.
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European banks – latest news from the FT
