New competitors have a small window of opportunity. They can offer clear incentives for new clients to move as interest rates rise. Fintechs and neobanks are likely to try to attract clients away from traditional banks. But it also won't be easy as the old school is not likely to just sit there and watch them siphon off money. And the pivot in interest rates will also make it harder for the disrupters to get the fresh capital that they will need for expensive marketing campaigns.
6. The Unbearable Weight of High Prices
The franc is unlikely to weaken much given the uncertainty in the world right now. For off-shore banks with European clients, none of this is good news. They are like traditional exporters. They produce in francs but their revenues are in euros or dollars.
Given that market access to the EU remains difficult, many institutes could resort to radical measures.
7. Bear Fodder
The 20 percent fall in equities since the beginning of the year in major western markets is a clear message. The bear market is here. That doesn't help the major business of Swiss banking - wealthy private clients. Booked losses on securities will hurt assets under management, and commissions.
The SNB's step will be seen as controversial by many. And the picture only darkens for international wealth managers if the interest rate hikes in the US and eurozone prompt a recession.
8. Questionable Safe haven
The franc has strengthened in recent months because of its status as a safe haven. The SNB's hike serves as a confirmation of that. The traditional interest rate gap between the franc and the euro has disappeared, making the Swiss currency more attractive on the foreign exchange markets.
But it is not clear if Swiss finance can benefit, as its reputation for stability has been shaken recently. In the past, however, the banks have attracted assets from abroad during uncertain times.
Additional reporting: Fredy Greuter, Thomas Pentsy, Samuel Gerber
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