SWITZERLAND: Sanctions Not the End of Neutrality, Lobby Says.

As published on finews.com, Wednesday 16 March, 2022.

Sanctions adopted by the federal government and enacted by Swiss banks against Russian individuals and institutions does not signal the end of Swiss neutrality, the Swiss Bankers Association chair says.

Following Russia's invasion of Ukraine, Russian individuals and companies have faced a slew of sanctions, with those enacted by the European Union adopted by the Swiss Federal Council. Despite Switzerland taking action, it does not signal the end of the country's well-known neutrality, according to the chair of the Swiss Bankers Association (SBA) Marcel Rohner.

"The banks in Switzerland systematically adhere to both national and international sanctions," Rohner said at the SBA's annual media conference on Tuesday.

In fact, sanctions have been in place since 2014 and it is no problem for compliance departments to implement updates and extentions. Additionally, after comparing sanctions against customer data, it is possible to block the assets in question within hours and subsequently inform the State Secretariat for Economic Affairs (Seco). Banks "have also been investing heavily in compliance for many years," Rohner added.

What is crucial for the banking industry is stability and reliability. Neutrality on the other hand is a question for politicians. Whether one adopts the sanctions or not, shows the values one represents. If neutrality is a determinant in the attractiveness of Swiss banks, customers should ask themselves why that is the case, Rohner said.

The degree to which the Swiss financial sector is exposed to Russia is difficult to assess. There certainly are individual client positions with very high exposure that have suffered losses. According to SBA estimates, Russian loans from Swiss banks amount to 0.3 percent, while funds from Russia are estimated to be in the low single digits, Rohner said, adding "we don't know more precisely."

In all, Swiss banks are healthy and in a good condition, also by international comparison,. SBA's focus is to ensure the continued growth of the Swiss financial center.

Aside from a few bumps in the road due to the European debt crisis and the strength of the Swiss franc, the past ten years have experienced growth, evidenced by the ability to meet high credit demand, Rohner said.