Odier Says It’s ‘Regrettable’ Swiss Bank Wegelin Had to Sell

By Simone Meier - Jan 27, 2012 5:34 PM GMT 
Patrick Odier, chairman of the Swiss Bankers Association, comments on Wegelin & Co. agreeing to a sale to Switzerland’s Raiffeisen Group, on Switzerland’s tax negotiations with the U.S., bank secrecy laws, new money inflows and capital buffers.
On his reaction to Wegelin:
“I only found out today, I find it unfortunate that the situation developed in this manner but it shows that there’s a need for a joint solution with the U.S.”
On whether other banks will follow:
“Each situation is different from the other. We have an open case, we have to resolve. We’re looking at a global solution and it’s being worked on heavily.”
“In general it’s regrettable that the oldest private bank of Switzerland has to be confronted with the only solution to sell itself to preserve the interests of its clients. I don’t think it makes too much difference whether it’s private or not. Each situation is different.”
On the U.S.-Swiss agreement:
“I think our administration is working very hard and I’m absolutely sure that if our President gave the impression that there was a possible solution this year, it’s because she’ll work hard on it. I really salute that. We know about the issue, we know about all technical aspects. We now need a political willingness on both sides of the Atlantic.”
On an amount that could be settled:
“I never heard any figure. The combination of all the aspects makes the solution a bit more complex. Everybody wants to know things that haven’t even been discussed with us at this stage. It’s important to solve the issue and sooner rather than later.”
On tax agreements with other nations:
“It’s the right and only way to go at this point. The sign that was expressed by Germany and England” is “very important. And it’s a signal to other countries. The agreements are very balanced.”
On new money inflows:
“The positive aspect is that Switzerland, because of its stability and infrastructure and the franc, has attracted moneys. This has been due to difficulties encountered in some financial centers, some geopolitical difficulties, the financial crises but also due to the strong growth of wealth in some parts of the world, which don’t have yet the financial infrastructure. It’s diversified across the world, I can’t pinpoint any particular region.”
On banking secrecy:
“Swiss bank secrecy belongs to what the financial industry wants to promote. We have to fight abuses.”
On negative factors to banks:
“On the pressure side, you have the fact that for many small- to medium-sized banks, earnings come from international activities, while costs are in francs. So margins will go down. The cost in general in the financing industry has been pushed toward higher levels due to the combination of many, many regulations that are partially justified and sometimes exaggerated. At the same time, innovation remains very strong.”
On capital buffers imposed in Switzerland:
“This is a proof that Swiss banks allow themselves to face more stringent standards than anywhere else. They experienced less difficulties as a financial marketplace than others. We can re-generate capital in Switzerland because of the good service mix. It could also turn to a competitive advantage.”
On the so-called “morality gap”:
“There’s a higher consciousness today of the dialogue needed of the financial sector and the rest of the economy and the population. That’s good. The responsibility of banks is foremost to serve clients and not to make profits.”
To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net