29/09/20

SWITZERLAND: Rich shift funds to Swiss banks during Covid crisis.

As published on swissinfo.ch, Tuesday 29 September, 2020.

A report by Swiss public television RTS says eight of the biggest Swiss banks received more than CHF80 billion ($86 billion) in net new assets during this period, and six of them recorded higher inflows of capital than the same period last year. UBS saw the biggest in terms of volume (CHF20.8 billion, up 1% on first half 2019), but Zurich Cantonal Bank saw the biggest percentage rise (up 444% to CHF13.6 billion).

Bank financial reports indicate that the funds came mainly from private individuals and companies in Latin America, Europe and the Middle East. The reports mention some country names but “otherwise remain vague”.

According to Bloomberg, British Lord Anthony Bamford, the billionaire head of excavator maker JCB, recently moved $6 billion to Switzerland from the Caribbean.

“For international clients facing the world health and economic crisis, Switzerland is a haven of stability and security,” Geneva Financial Centre director Edouard Cuendet is quoted as saying.

And tax lawyer Philippe Kenel told RTS that “Switzerland offers the image of a country which has handled the crisis well, which has a good health infrastructure” and whose tax system remains attractive. Several observers also point to the solid capitalisation of Swiss banks that can help them weather the crisis. RTS nevertheless raises the possibility that some of this money might be “dirty”.

As for Lord Bamford, RTS tried to find out why JCB moved from the Caribbean to Switzerland. Its reporters went to the headquarters of the holding company JCB Group Holdings, created at the end of 2019 and located in a rental building in Lausanne. “Here, the group, which has 15,000 employees worldwide, has no employees at all,” RTS reports. “The only person present in the apartment did not wish to answer our questions.”