The type of government in Switzerland in is federal Republic. The government president is elected from the members of the federal council. Switzerland is a republic governed under a constitution adopted on May 29, 1874, and amended many times since. The electorate not only chooses its representatives but also decides important issues by means of referendums, an integral part of Swiss government. Constitutional amendments may be initiated by a petition of 50,000 voters and must be ratified by referendums. Federal legislation may also be made subject to referendums. The strongest Swiss political parties are the Radical Democratic Party, standing for strong federal power; the Social Democratic Party, advocating democratic socialism; and the Christian Democratic People's Party, opposing centralization of power. Other political parties of note are the Swiss People's Party, the Independent Alliance, the Liberal Party, and the Greens, an environmentalist group.
Switzerland has eight major trading partners. They are Germany 22.6%, France 9.2%, Italy 8.0%, UK 5.5%, Austria 3.2%, US 12.4%, and Japan 4.0%.
Switzerland exports watches, chemicals, machines, pharmaceuticals, precision instruments, and automobiles. Switzerland's import partners are Germany at 31%, France ay 12%, Italy 9.7%, Netherlands at 5.1%, UK at 5.7%, US at 7.15, and finally Japan at 2.9%. Switzerland GDP for agriculture is 2.8 %, for industries are 31.1 % and services at 66.1%.
The currency of Switzerland to a US dollar is 1.07 francs equals one dollar. The Swiss National Bank is the bank of issue, in which the cantons, other banks, and the public hold shares. Switzerland is a major international financial center; international depositors and financiers because of Swiss political and financial stability and traditional secrecy in banking transactions favor its banks. Private banking is one of the country's principal sources of income. Zürich is the country's main banking center; leading commercial banks are the Union Bank of Switzerland, the Swiss Bank Corporation, and the Swiss Credit Bank. The Zürich Stock Exchange is one of the most important in Europe, and the city is also a major trade center for gold. The population of Switzerland is 7,283,274 according to July of 2007. The birth rate is 10.12-births/1,000 populations. The death rate is 8.77/ 1,000 population. The life expectancy at birth for a male is 76 years old and for a female is 82 years old.
There are many different holidays in Switzerland some of them are New Year's Day, Easter, Labor Day, and Ascension, Whit-Sunday and Whit-Monday National day August 1st, Federal Day of Prayers, A thanksgiving Holiday in mid-September and Christmas. Some of the different sports they play in the winter and the summer are tennis, water sports, hiking, and cycling in the summer. Some of the winter activities are skiing, snowboarding, curling, tobogganing, and hockey.
Switzerland has one of the highest standards of living in the world. Services account for fifty percent of employment. Manufacturing is about thirty percent with business and finance following with about eleven percent. The country does not have a large agriculture and forestry percentage because of poor soil and climate conditions for growing. Some of Switzerland major cities are Berne which is the capital and Zurich which is the largest city, and financial center. Basel is a commercial center. These cities have many attractions for tourist. The city of Berne has a thirteen century clock tower, fountains and old cathedrals. Banks in most countries are prohibited from divulging information about their clients, and the provisions of the Swiss law follow the same lines. Swiss law is especially strict on any breach of confidentiality, whether in banking or in other commerce. The banking act adds a special section (introduced in 1934, in order to protect accounts of Germans, especially German Jews, from Nazi confiscation) which makes it a criminal offense, with the possibility of an individual going to jail, for the bank or its employee or agent to improperly divulge any confidential information. These portions of the banking law have been interpreted, both in practice and by the courts, to make it a serious offense to divulge any information about a bank customer to any third party, including official requests of foreign governments, unless very specific criteria have been met. Swiss bank secrecy is reinforced by a constant awareness of the seriousness of the bank's obligation to maintain confidentiality, starting with bank employees having to sign the secrecy portion of the banking act as a condition of employment. Both individuals and the banks are prosecuted if a lapse is discovered; this keeps awareness of bank secrecy high and lapses rare. While this culture of absolute discretion is integral to the Swiss banks, the branch offices outside of Switzerland must operate according to the laws of countries in which they are located, which may not provide so much protection. The perception that Swiss bank secrecy provides a means of hiding criminal activity is, and has been for many years now, largely myth. Banking secrecy is not a protection from criminal investigations, and Swiss legal authorities routinely cooperate with their foreign counterparts in such matters. The general rule is that an activity which both the foreign government and Switzerland consider a crime will result in cooperation, including Swiss authorities examining bank account transactions. The perception that Swiss bank secrecy can be used to hide criminal activity is due to many factors. Partly it is an historical relic; prior to the 1980s, there were a number of financial activities which Switzerland did not consider criminal, but which many other countries did. Today, Switzerland's financial legislation is quite similar to that of most other OECD countries, and financial crimes in one jurisdiction are likely to be considered criminal in Switzerland. Partly it is due to the difficulty having enough information to make a request; "fishing expeditions" cannot be done. This is quite similar to both internal and international practice in most countries, but can be used as a convenient excuse by frustrated criminal investigators. And partly it is due to specific differences in criminal law; in particular, the legal definition of what constitutes a tax crime varies considerably from country to country. Inheritance, divorce, and civil tax matters present special problems vis-a-vis banking secrecy because these are civil rather than criminal matters. Large institutional investors typically hold securities in several countries. Big banks specializing in the securities business hold such securities in safe custody, and they monitor and manage them irrespective of the place of custody. This service is known as global custody. Above and beyond safe custody, it includes settlement, collection of interest and dividend payments, providing information on corporate policies (e.g. capital increases) and tax returns. Furthermore, added value services such as securities lending and various information services (portfolio analyses, performance calculation, fund accounting etc.) are gaining in importance. Safe custody, and especially global custody, is a fast-growing business. However, global competition is causing a decline in margins and an increasing pressure on costs. Moreover, growing customer expectations are giving rise to continuous costly investments in processing systems which can only be justified by adequate business volumes. Providers of financial services are also attracted to Switzerland by the efficiency of its capital market logistics which facilitates the smooth settlement of securities transactions. The joint organizations of the banks and stock exchange are the main logistics suppliers. Banks in Switzerland are thus well equipped to participate successfully in the global custody market.
Switzerland is neither a member of the European Union nor of the European Economic and Monetary Union. Consequently, Switzerland does not participate in the
European Central Bank's interlinking payment system TARGET that provides the necessary links between the domestic real-time gross systems (RTGS) of EU member states for cross-border euro payments. On behalf of the Swiss financial centre, Swiss Interbank Clearing developed the euro SIC system which enables online and real time euro payments between Switzerland and the EU. Through the German RTGSplus and therefore via TARGET euro SIC is linked to the RTGS systems of all EU member states. Banks that participate in euro SIC maintain a euro denominated giro account with SECB, the Swiss Euro Clearing Bank GmbH in Frankfurt. The SECB is operated jointly by the Telekurs Holding AG, the Credit Suisse Group, UBS AG and the Swiss Post Finance. Based in Frankfurt, it controls and monitors euro SIC. As a member of the German clearing system RTGSplus, and therefore indirectly of the union of national clearing systems in the EU, known as TARGET, the SECB provides a link to all RTGS systems of EU member
States. In addition, the SECB performs all related cash and collateral management services. More than 120 Swiss and foreign financial institutions participated in euroSIC in mid-2005. Via euro SIC, participants can access more than 1,600 financial institutions in Switzerland and more than 36,000 around the world.
The manager of a Swiss investment fund as well as the custodian bank where the fund assets are held both need to be licensed by the Swiss Federal Banking Commission (SFBC). Furthermore, the fund prospectus, issued jointly by the fund management company and the custodian bank, is subject to SFBC approval. The fund management as well as the investment fund are supervised by the SFBC and audited by an independent auditing firm which is recognized by the SFBC. Professional fund distributors also require a license from the SFBC. The investment fund business is significant domestically as well as by international comparison. In terms of volume of fund assets under management, Switzerland ranks ninth worldwide. Banks are continuously expanding their investment fund services. Above and beyond the mere investment funds range, this applies also to related services such as fund portfolios, fund accounts or fund savings schemes. Following the merger between the Union Bank of Switzerland and the Swiss Bank Corporation announced in November 1997 and implemented in June 1998, there are now only two big banks in Switzerland: UBS AG and the Credit Suisse Group. A strong international focus and business network is a characteristic shared by both big banks. Both are represented with subsidiaries and branches in about 50 countries, including all major financial centers. UBS employs around 70000 people; 39% of its employees working in the Americas, 38% in Switzerland, 16% in Europe and 7% in the Asia-Pacific time zone. The Credit Suisse Group employs around 60 000 people, two-thirds of whom abroad. Being universal banks, the big banks maintain a dense network of domestic branches as well. The core business of the big banks comprises worldwide asset management and investment advisory services for private and institutional investors, investment banking (underwriting, mergers and acquisition, leveraged finance, privatization, equity and interest rate products including derivatives, foreign exchange) as well as retail banking in Switzerland. In addition, the Credit Suisse Group provides insurance services to private and institutional customers through its Winterthur Group. As at the end of 2004, the big banks accounted for 66% of the combined balance sheets totals of all banks.
Swiss banks UBS AG (UBS) and Credit Suisse Group (CS) may need to raise their liquidity levels. The two Swiss banks may need to retain 45% of their customers' deposits as the Swiss regulator intends to increase their liquidity requirements. The banks may need to hold 45% of their customers' demand deposits in cash or in highly-liquid securities such as government debt. The higher liquidity level represents almost three times the cash the Swiss banks are currently required to hold for the deposits. However, the banks are discussing with the regulators so that liquidity requirements may be lowered. The higher liquidity requirements by the Swiss regulators are intended to better position the Swiss banks to survive another crisis. However, this would also restrict capital and increase the cost of capital. Indirectly, this would limit in the lending of the Swiss banks. UBS AG received a support of 6 billion francs ($5.8 billion) from the Swiss government for its risky assets spin-off. The Swiss government also took an 8.5% stake in the bank. Both UBS AG and Credit Suisse have written down billions due to credit related woes. The Swiss regulators are planning to disclose new liquidity management criteria in the first quarter of 2010, which Banks have to put into practice in the second quarter of 2010. Swiss banks' assets are bigger than the gross domestic product of any G-10 country. However, the recent dilution of the Swiss bank secrecy is resulting in massive fund outflows as worried investors are eyeing a safer refuge. Moreover, if tighter liquidity requirements are implemented, the profitability of Swiss banks would be significantly impacted. Headquartered in Zurich and Basel, Switzerland, UBS is a global firm providing financial services to private, corporate and institutional clients. Its strategy is to focus on international wealth management and the Swiss banking business alongside its global expertise in investment banking and asset management. In Switzerland, UBS is the market leader in retail and commercial banking.
UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 36% of its employees working in the Americas, 36% in Switzerland, 15% in the rest of Europe and 13% in Asia Pacific. UBS employs more than 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange, the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE). UBS Culture Foundation sees and understands itself as a constituent part of society with the task of reflecting on continuity and change in politics, economics, science and the media from the perspective of cultural and artistic creativity and productivity. We promote the advancement of cultural activities and artistic creativity, communication and exchange between artists and society, and the diversity of cultural expression. In particular, we support the generation, dissemination and mediation of contemporary forms of art and culture. UBS Culture Foundation supports artists of Swiss nationality, foreign artists with permanent residence in Switzerland, cultural projects by professionals that focus on Switzerland as well as the acquisition of significant works and objects by art or cultural-historical museums in Switzerland.
Credit Suisse wants to be the leading bank in terms of client satisfaction and profitable growth. At the same time, the bank's guiding principles continue to apply, namely that the focus should always be on the client's needs, that teamwork should form the basis of business, and that a good reputation is crucial. The concept of the integrated business model, introduced in early 2006, has enabled Credit Suisse to take a decisive step forward. The Private Banking, Investment Banking, and Asset Management divisions work hand in hand. This enables enable client advisors to service their clients from a single source and to offer them access to all services of the global bank through one interface.
Specifically, Euromoney has underlined the impressive level of innovation evident in the private client and corporate client business areas. The customized derivative products for SMEs and the prize-winning branch concept with respect to customer service and branch design were cited as exemplary. In addition, Euromoney praised the expertise of Credit Suisse in the wealth management sphere, as evidenced by the sophisticated investment and advisory solutions geared around the needs and corresponding life stages of the bank's different client groups.
The award is all the more gratifying as it represents confirmation of last year's impressive Euromoney ratings for Credit Suisse. In addition, the "Award for Excellence" from Euromoney confirms the other awards that the bank has received in recent months. For example, the magazine Global Finance likewise awarded Credit Suisse the citation of "Best Bank in Switzerland" at its "World's Best Developed Market Banks Awards 2008" ceremony. Global Investor Magazine in turn selected Credit Suisse as "Wealth Manager of the Year 2008," while in its "Elite Report" the Handelsblatt awarded Private Banking in Switzerland (and in Germany) its ultimate accolade of "summa cum laude." The "Award of Excellence" underlines our outstanding market position in an environment that is challenging both competitively and economically," observes Ulrich Körner. "At the same time, it acts as an additional spur in our efforts to systematically implement our strategy of an integrated bank, to exploit the growth potential that this releases, and to develop the best solutions for our clients at all times." Region Switzerland is of great importance in this drive. "Best Bank" is therefore not only a boost for the 21,000 employees of Credit Suisse in Switzerland, but also very much an accolade for the large number of loyal clients who encourage and strengthen Credit Suisse in its domestic market. The Swiss National Bank conducts the country's monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.
The Swiss National Bank's assets essentially consist of currency reserves (foreign exchange and gold reserves) as well as financial assets in Swiss francs (securities and claims from repo transactions). They represent a part of Switzerland's national wealth and perform important monetary policy functions. Part of the SNB's assets is used directly for the implementation of monetary policy.
Financial stability is a key prerequisite for the functioning of a national economy and for the effective implementation of monetary policy. A stable financial system can be defined as a system whose individual components - financial intermediaries and the financial market infrastructure - fulfil their respective functions and prove resistant to potential shocks. Under the National Bank Act, the SNB has the task to contribute to the stability of the financial system. Moreover, the Act assigns the oversight of systemically important payment and securities settlement systems to the SNB. In the field of financial stability the SNB cooperates with the Swiss Financial Market Supervisory Authority FINMA. A Memorandum of Understanding (MoU) contains a clear division of the individual responsibilities of the two institutions and regulations on their cooperation.
The purpose of SNB open market operations is to provide the Swiss franc money market with liquidity while the purpose of liquidity absorbing operations is to withdraw surplus liquidity from the banking system. Open market operations that create liquidity are usually concluded by way of auction. These auctions are conducted either by volume tender or by rate tender. In the case of volume tenders, the SNB's counterparties request a certain amount of liquidity at a fixed price (repo rate). In the case of rate tenders, the SNB's counterparties inform the SNB of the amount requested and the interest rate that they are willing to pay for the auctioned liquidity. The repo rate, the size of the individual operations and their maturities depend on monetary policy requirements. Repo transactions are generally concluded with a one-week maturity. In special circumstances, the maturity may vary from one day (overnight) to one year. The National Bank sets the maturity of repo transactions in such a way that it is able to influence money market rates on a daily basis. Due to the maturity structure of the repo transactions, the commercial banks have to request liquidity almost every day to ensure they have the sight deposits required to meet minimum reserve requirements.
In order to offset unexpected external factors on liquidity supply and to have an influence on undesired developments in short-term money market rates at any time, the SNB can place or accept offers (quotes) on the Eurex Zurich Ltd electronic trading platform.
In the case of standing facilities, the National Bank extends the intraday facility to its counterparties to provide them with interest-free liquidity during the day (intraday liquidity) through repo transactions. This liquidity facilitates the settlement of payment transactions via Swiss Interbank Clearing (SIC) and foreign exchange transactions via Continuous Linked Settlement (CLS), the multilateral payment system. The funds received must be repaid by the end of the same bank working day at the latest. These funds do not qualify when evaluating compliance with minimum reserve requirements or liquidity requirements under banking law.
The National Bank provides a liquidity-shortage financing facility to bridge unexpected liquidity bottlenecks. The interest rate for liquidity provided through this facility is 0.50 percentage points above the call money rate. The basis is the Overnight Repo Index (SNB) for the previous bank working day. However, since the beginning of 2006, the only way of accessing the liquidity-shortage financing facility has been via special-rate repo transactions. The precondition for concluding special-rate repo transactions is that the counterparty has access to the electronic trading platform of Eurex Zurich Ltd and that it has been granted a limit by the SNB which is covered by collateral eligible for SNB repos. The limit determines the maximum amount of liquidity that counterparty may obtain, and it is utilised in the form of an overnight repo transaction. The securities are held by the counterparty in a "Custody Cover Account SNB" at SIX SIS Ltd.
In the case of open market transactions, the initiative for concluding a transaction lies generally with the SNB. Only where standing facilities, i.e. intraday and liquidity-shortage financing facilities, are concerned does the SNB merely lay down the terms under which the commercial banks can obtain short-term liquidity.
The National Bank Act only broadly outlines which transactions are at the SNB's disposal for performing the monetary policy tasks assigned to it. Further details are spelled out in the Guidelines on Monetary Policy Instruments adopted by the Governing Board. The Guidelines, which have been prepared as a corollary to the monetary policy concept already defined by the National Bank, describe the instruments and procedures used for implementing this policy. In particular, they specify the terms on which the National Bank concludes transactions and the procedures that are to be observed in such cases. Further, they specify the types of collateral that are eligible for monetary policy transactions involving the SNB.
The Swiss franc, denoted CHF (which stands for the Confoederatio Helvetica franc), is the official currency of Switzerland and Liechtenstein. The currency is used by the Central Bank of Switzerland. The Swiss franc is the only remaining currency in Europe that is still named franc. The Swiss franc can be subdivided into hundredths known as Rappen in German, centime in French, centesimo in Italian and rap in Rhaeto-Romanic. The French names given are used in the English language.
Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.
The government of Switzerland is a federal republic and is very likely the closest state in the world to a direct democracy. The central government of can be divided into three branches: executive branch, legislative branch, and judicial branch. In the executive branch the Swiss parliament and government in Bern are known as the Curia Confoederationis Helveticae. The cabinet is a 7-member executive council known as the Swiss Federal Council. The Council heads the executive branch and is elected by the Federal Assembly for a four-year term. The President and Vice President's roles of the Confederation are largely ceremonial and are elected by the Federal Assembly from among the members of the Federal Council for one-year terms. The legislative branch of Switzerland is a bicameral parliament made up of a Council of States and the National Council whose members are elected to four-year terms. The two chambers together are referred to as the Federal Assembly. Switzerland's judicial branch is a Federal Supreme Court, with judges elected for six-year terms by the Federal Assembly.
The dollar (USD) against the Swiss Franc is mostly considered as the 'safe-haven' currency because part of the core value of swiss franc, CHF is backed up by gold. When gold price appreciates and/or during geopolitical challenges the swissie usually rises as investors look to safer grounds.
