Economic policy environment
After a 2022 dominated by sharply rising inflation and the impact of geopolitical crises, the Swiss economy picked up only slightly in the first half of 2023. The labour market was robust.
Interest rate situation
In response to persistently high inflation, the SNB has raised its policy rate in a number of steps and indicated that further hikes may be on the way. The interest margin for new loans and mortgages is back to the levels seen before the negative interest rate phase. However, the rate rise harbours economic risks.
The central banks’ abandonment of years of low interest rate policy presents challenges for banks’ risk management. Growing geopolitical tensions and financial fragmentation are also hindering cross-border capital transactions.
Digital finance, innovation and cyber security
Technological advances are creating new opportunities for the Swiss financial sector to remain competitive and innovative. At the same time, it is especially important to increase resilience to cyber attacks.
Regulation and compliance
Regulation of the banks and financial markets plays a key role in the attractiveness and competitiveness of the Swiss financial centre, which is one of the best regulated of its kind in the world.
An attractive tax environment and effective compliance rules are key locational advantages for the financial sector. Alongside taxation of banks’ own activities, a major issue is regulations to ensure that customers comply with their own tax obligations.
After rejecting the institutional framework agreement with the European Union (EU), the Federal Council made it clear that it intended to continue with the bilateral approach. At the same time, negotiations on a financial services agreement between Switzerland and the United Kingdom (UK) are making progress.