Adrian Noesberger is the new president of the Association of Foreign Banks in Switzerland. He spoke to finews.com about his plans as well as Switzerland's financial center and its difficult relations with Europe.

Mr. Noesberger, what makes the top role at the Association of Foreign Banks appealing?

I have been active on the board for eight years, most recently as vice president. The exciting thing is to lead an association with very interesting personalities to define milestones and then achieve added value for our members.

That is our task. We have top-class people on our board. We also deal with fundamental issues or political and geopolitical topics. Foreign banks are very important in the Swiss financial center.

How would you assess the current environment?

Since the financial crisis in 2008, Swiss banks and foreign institutions have changed a lot. Transparency, exchange of information and other developments have changed the business model significantly.

The number of foreign institutions has decreased as has the number of Swiss banks. So no gap has opened up between the two. But the Swiss financial center is far from dead. On the contrary, I believe it is much stronger than it was before the financial crisis.

Which factors are attractive for foreign institutions?

Stable political and legal framework conditions are still the most important factor in banking, and Switzerland is still first-class in this regard. The universities along with the ETH and the level of professional training are also a big plus. The educational standard is very high, especially in comparison with other countries.

When you see the expertise and strength that is available around Zurich or Geneva within a radius of 30 kilometers, it's not easy to find that internationally - except perhaps in London. That is of course a very good breeding ground for a foreign institution if it wants to set up a banking business or financial services.

Where do you see Switzerland by international comparison?

In addition to the framework conditions, clients appreciate above all the openness of the financial center. 

Switzerland and London are still the two really big, competent financial centers in Europe. In Asia, it's Singapore. Hong Kong is currently undergoing a change process. And then there is the US and the Middle East. There will always be events and factors impacting the industry, but so far nothing has really undermined the foundations of the Swiss financial center.

There are however geopolitical trends or changing conditions that put a strain on the Swiss financial center. One example of this is when the financial industry did not get the majority of people’s support in last year's vote on withholding tax and stamp duties.

And what attracts foreign clients to Switzerland?

One big advantage is the broad international range of services and network. Try opening an account in Swedish krona in Italy, Belgium or Spain in order to buy shares on the Stockholm Stock Exchange. In Switzerland, we have the systems and the infrastructure enabling such activities. There are many good reasons for international clients to maintain a banking relationship in Switzerland.

The composition of the Association of Foreign Banks is very heterogeneous. How do you reconcile the different interests?

Yes, that is true. We have member banks with a focus on private banking, asset managers, corporate banking or investment banking, and also the subsidiaries of major foreign banks with a very broad range of services.

We work closely with the Bankers Association (SBA), which is even more heterogeneous than we are with its universal and regional banks. But the important issues are fairly congruent between the Swiss and foreign banks.

«The bilateral agreements are at a dead end»

An important topic is free market access in the EU. How do you assess the situation here?

Personally, I believe that the bilateral agreements have currently reached a dead end. And unfortunately, we also see that the Federal Council does not consult the financial sector enough on this issue and is prioritizing other topics. Perhaps this is because the inclusion of the financial sector has always led to difficult discussions in the past.

How burdensome is the difficult relationship between Switzerland and the EU for foreign banks? What could be a way forward here?

This is a very important issue for many foreign banks, which also offer an excellent international network from which the Swiss financial center can also benefit. Take the example of a Swiss subsidiary of a European bank. It encounters hurdles when it wants to do cross-border business with European clients.

In Germany, there is the possibility of a simplified exemption, which is granted by Bafin individually for each institution. This is a transparent, pragmatic and clearly regulated process. Such a model could also work with other neighboring countries.

«Over time, best practice will emerge»

For their part, policymakers have recognized that the financial industry has important leverage in achieving climate goals. And all stakeholders, including regulators, are still in a learning process on this very complex issue. Ultimately, there will not be an all-encompassing solution, but it is possible to achieve one milestone after the other. I think that a best practice will emerge over time, which could then also lead to a law in Switzerland one day.

Digitization and blockchain are important topics in banking. Do foreign banks have different needs in this regard?

This is one of the topics I want to focus on more. For me, digitalization and cyber security belong integrally together and are very important among our members. This also includes the topic of crypto and blockchain. A favorable regulatory environment has developed in Switzerland, which is used by foreign banks. Spanish BBVA for example has placed its crypto and part of its digitalization activities within its Swiss subsidiary.

The Ukraine war and the sanctions against individuals and organizations from Russia were a big topic last year. How did the foreign banks deal with this?

The sanctions in the US, the EU and Switzerland have of course created challenges for our members. Suppose you are the Swiss subsidiary of a bank from a non-EU country, but you also have business and clients in the EU.

The question is then, where and for whom do which sanctions apply? This can involve very confusing legal pitfalls that can still have consequences years later. And I expect that the topic of sanctions, not only against Russia, will continue to occupy the banks in the future.

Adrian Noesberger has been CEO of Schroder & Co Bank AG, a subsidiary of the British asset manager Schroders, since 2013. He brings many years of experience in the financial industry as well as in-depth knowledge of the requirements and challenges of foreign banks in Switzerland. In the past, Noesberger held many senior positions at renowned financial institutions. He holds a master's degree in industrial engineering from ETH Zurich and is a member of the Board of Directors of the Swiss Bankers Association. He is also part of the board of Economiesuisse and on the foundation board of the Swiss Finance Institute (SFI).