The government is to intensify efforts to overturn a decision by Germany which makes it difficult for Swiss banks to access its financial markets.This content was published on March 17, 2004 - 15:36
Switzerland's bankers have rejected Germany’s claims that the restrictions are simply designed to protect consumers.
The banking row forms part of a growing list of grievances - cross-border taxation, aircraft noise and tougher border checks - that have strained relations in recent months between Switzerland and its biggest neighbour.
Berlin declared last year that foreign banks based outside the European Union and the European Economic Area (EEA) could only promote their services in Germany if they were registered there.
The Swiss cabinet insists the decision will unreasonably prejudice Swiss banks.
Barbara Hendricks, Germany's deputy finance minister, said at the weekend that because Switzerland was neither a member of the EU nor the EEA, the country’s banking regulators were not automatically recognised by Germany.
“The aim of the directive is to protect German consumers from dubious operators who are not accountable to German banking regulations,” she said.
Hendricks told the German business weekly, "Handelsblatt", that the directive would become law this year.
When contacted by swissinfo, the Swiss Federal Banking Commission declined to comment on the row. But an official said the Swiss were currently involved in negotiations with their German counterparts.
James Nason, a spokesman for the Swiss Bankers Association, told swissinfo the ruling was a serious problem for Swiss banks seeking to expand their business.
“Germany is an important source of new customers for the Swiss financial services industry,” he said.
Bankers say it is difficult to assess the potential cost of the decision, because it does not apply to existing German customers of Swiss banks or those that approach Swiss institutions under their own initiative.
“Whiff of protectionism”
Lobbying efforts by the Swiss government are set to increase.
The issue is likely to be discussed by the Swiss president, Joseph Deiss, and his German counterpart, Gerhard Schröder next month.
Ideally, Switzerland would like a general exemption for its banks, although experts believe the government has more chance of winning a partial concession on certain types of banking.
The banks have hired the former German finance minister, Theodor Waigel, to argue their case.
Nason said that if Germany was genuine about protecting its banking customers, it should distinguish between well and badly regulated countries, rather than whether they belonged to the EU.
“The Swiss don’t really see why they’re being thrown into the same pot as some of the less well-regulated financial centres,” said Nason. “It does have a slight whiff of protectionism about it.”
“I find it difficult not to conclude that the German authorities are trying to discourage their citizens from banking offshore,” he added.
swissinfo, Jacob Greber in Zurich
Last autumn Germany announced a reinterpretation of existing banking law forcing banks from outside the EU or EEA to register before being allowed access to German customers.
Germany says the move is designed to protect customers from "dubious operators" based in countries with weak banking regulations.
The Swiss cabinet describes the proposal as prejudicial and is lobbying Berlin for an exemption.
The Swiss argue that their banks are some of the best regulated in the world.
Swiss banks have appointed former German finance minister, Theodor Waigel, to argue their case.
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