Why Swiss Banks are no longer 1st choice

 

They are no choice at all for American “Persons”

Reader Comment:”

They say in this article [below]  the change in Switzerland  from personal  liability in private banks (personal liability of bank owners, directors &  managers) to limited liability over the funds deposited in their bank after this change offers “more protection at the cost of transparency…”  I disagree. Isn’t  less safe now than it used to be ? Would you still stash you mother lode in a private bank in Switzerland where they could manage your money efficiently?

Grandpa Says:

Of course that statement:  after this change in Pictet, offers more protection at the cost of transparency... is total B.S.   Limited Liability means just that. Besides secrecy, the attraction of Swiss Private Banking used to be that the richest guys in Switzerland (and in those days the world) were personally liable for the assets in your account. Additionally, the principals could NOT under Swiss law go bankrupt.  In the good old days, they would do jail time if their depositors lost money. Of course that didn’t mean the Swiss banks guaranteed profits on speculation. However, if their bank issued bonds or certificates of deposit, & they failed to pay up on their obligations, then the directors and owners were personally liable.

Because most of their American and European clients have moved on, many Swiss banks are already close to insolvency. A bank in Ticino province where we did business for many year had  a gorgeous multi-story building on a busy street in Lugano. Recently it simply shut its doors. The building now stands vacant — for all of the current year. The owner, whom we knew personally, was a very honourable old geezer. He personally told all his clients to move their accounts. We did and didn’t lose anything. Those whom he couldn’t contact — i.e. dormant accounts took no action. I think they may never recover anything now.

The bottom line for me is that IMO Swiss banks are no longer any safer than those in other 1st World Countries. And without privacy, there is no particular reason to use them any more unless you have a home in Switzerland and you do it for convenience. The amount of cash you can add and withdraw in Switzerland without any suspicious (money laundering)  activity report used to be unlimited. Today it appears to be CHF 20,000. This beats neighboring Italy where it is closer to €500! In many countries, laws are being passed to practically eliminate the use of paper cash entirely. Governments seem to want to have control &/or  a computer record of every transaction.

Reader Question:

 Do you think a Swiss private bank (I think in the banking world nobody is reliable) is a good option for a mother lode for an abiding non American citizen?

 As long as you declare the account wherever is required  …

Grandpa says:

A few Swiss banks are better than the others at picking stocks,bonds and better performing investments. They also can keep funds for you their name but on deposit in places like Singapore. This can have certain advantages. These days Swiss Banks will (for the 1st time) negotiate  competitive fees (about .05% per year)  if you keep over  chf 1 million with them.

Bottom Line:   I have had too much personal experience with extreme banker incompetence in the USA,  Panama, Emirates, Belize, Andorra, Mexico, ex-communist countries, and the 3rd world in general. Thus, if you are wealthy enough to be welcomed by a 1st class Swiss Bank (Private Banking Department) then yes: SWITZERLAND would still be my 2nd choice for a mother lode account. Why? Because in my view they are honest and efficient. Also, if the world really goes to hell and there is a 3rd World War, Switzerland is likely to remain a neutral, safe place both to live and have enough assets to live on in place there.  That is why I will own a place there and have enough   local assets to live on. A friend has a similar idea about having his last redoubt / escape hatch in a deluxe gated community he setup in a remote area of Argentina. I have my reservations about that because the Argentine Govt has a long history of confiscating the assets of any wealthy citizens, whether just locals, residents or foreigners. Switzerland is just the opposite. But if you like Polo, wine & isolation, and if you can afford a 3rd home, why not buy there. Details from Grandpa.

For me, now, Singapore comes in at 1st place as a place for banking and securities trading. But with a restive China, and the USA pushing Singapore to give up its banking secrecy, it is not without risk. Thus, I would want to divide my mother lode between at least 2 banks in 2 countries. If I  were you and could afford it, I would also have at least 1/3rd of my assets in non-paper assets*. Clients and ex-clients may want to discuss this with me personally as this kind of information is not for e-mail or general circulation. No big secrets though: I am talking about owning less liquid, but valuable things* where you have some special expertise. Like What?– Like purebred animals/birds, rare classic cars, antique watches, art, coins, gems, vacant agricultural waterfront land,  vacation apartments,  etc. 

But above all, I advise you to have some kind of business or professional practice that makes you a valued member of the community. Some preferably portable trade or profession that will earn you a good living even if all your assets go up in a puff of smoke. Education is one asset that is perhaps more valuable than any other. If you review my chapter in PT, “The Chinese & Jewish Secret” you will be reminded why this is true. Read our books, Bye Bye Big Brother and INSIDER SECRETS.

That’s all for now.

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Recent Washington Post Article/ Wall Street Journal on Swiss Banks

Under heavy pressure from international regulators after the global financial crisis, Switzerland has agreed to phase out its long tradition of banking secrecy (AFP Photo/Attila Kisbenedek)…As Switzerland’s long-cherished banking secrecy practices evaporate, the institutions that helped create the world’s largest offshore tax haven are dramatically rethinking their business models in a bid to survive.

Post your comments, thoughts, related personal experiences, corrections or questions below.