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Banking System in Switzerland
Banking System in Switzerland

Banking System in Switzerland

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  • Pages: 2 (642 words)
  • Published: October 15, 2018
  • Type: Research Paper
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One of the most notable services in Switzerland is considered to be banking. Swiss banks are popular for their very old system in banking confidentiality.

Many of the bordering countries of Switzerland have also implemented equivalent banking structures. However there are numerous false impressions about bank secrecy and what policies are adopted by Switzerland related to it. Banking privacy was first introduced in Switzerland in 1934. It assisted German Jews who were trying to protect their money from being seized by Nazis.Swiss banks have been pressurized by foreign countries not to offer shelter for money of dictators, terrorists and criminals (The Economist, 2008).

Swiss banking secrecy today is intended to provide security to the account holders information from being given right of entry by third parties. It is often unnoticed that Switzerland is one of the major and most well-organized coordinated financial centers in the world today with many procedures in position to counteract money laundering and stop assets being used to provide funding to terrorist activities.Switzerland toyed with the thought of enforcing a preservation tax in replace for keeping the identities of their clients off the record. In July 2003, the European Union Savings Tax Directive was approved. Apart from other distinctive qualities, the Swiss banking system is well known for its diversity. Swiss Banking Secrecy Under the constitution of Switzerland, the individual freedom and private property are guaranteed.

Because of the high value to individual liberty and privacy, the Swiss banking system has gained the reputation as the life preserver for many political refugees.However, bank secrecy is not a

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bsolute because it has to comply under specific legal circumstances. Swiss authorities do grant the access to private records in certain cases. The myth of numbered accounts All bank accounts in Switzerland enjoy the same degree of secrecy and confidentiality. The bankers are required by the law to maintain silence about his or her customer’s affairs and dealings under the penalty of fines or even imprisonment. The Banking Law has no requirement concerning accounts designated by secret numbers or by passwords, since they have to extend the banking secrecy or fortify its protection.

The numbering account is just an internal technical procedure that ensures that only few bank executives know the real identity of the depositor (Euroweek, 2007). Broadly speaking, the name that is with the number will be known to very few employees. Thus, the bank reduces the opportunities that any of its employees will be induced through indiscretion, bribery or blackmail to reveal information about the client. At the same time, it protects the rank and file of employees from coming in the hands of foreign intelligence activities.Anonymous numbered accounts do not exist. Numbered accounts are opened only when the depositor who is already the client of the bank gives legal reasons for wishing this protection.

Services Offered by Swiss Universal Bank The Swiss universal bank offers all banking services which include lending business, property management and savings recommendation, payment dealings, deposit business, stock exchange dealings, underwriting business and financial analysis.Other countries separate their various banking activities. Laws passed by the official body are currently in progress in United

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States to liberalize the system. Swiss Interbank is an electronic payment system which is used by banks to handle electronic transactions. It is estimated that in 2005, it handled three hundred million transactions while generating revenue of forty one trillion Swiss Francs (Faith, 2005).Switzerland has four hundred and eight banks which have been approved and licensed by the government to provide financial and banking services to its clients (Delahunty, 2006).

UBS AG is the largest bank in Switzerland, followed by Credit Suisse as being the second largest. These banks are famous in the global financial market because of the banking services which they offer in various countries. The Federal Banking Commission provides guidelines and supervises the operations of these major banks.

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