Interview with Simon Amrein and Martin Hess

Mr Amrein, you have compiled a new historical dataset on the development of the Swiss banking sector. What struck you first? Amrein: The most striking feature is the constant change in the banking market. The data collection begins in 1702 with the Bern-based banking firm Malacrida, which failed as early as 1720 in the wake of the South Sea Bubble, one of the first major speculative crises. We have recorded at least 1,900 banks since the 18th century. Today, around 220 remain. Most banks have therefore disappeared again. On average, a bank in Switzerland existed for around 50 years. Institutions that survive for several centuries are the exception rather than the rule. That sounds like a history of crises? Amrein: It is primarily a history of business models adapting to changes in the banking environment. Crises are part of that story, as are changes in the regulatory environ­ment, monetary policy and economic development, as well as wars.

One factor appears to run through every period without exception: the pursuit of efficiency. The number of banks peaked in the 1880s at around 750 institutions. Since then, it has tended to decline, with one notable exception in the second half of the 20th century. The fragmented banking market of the 19th century, with its many small, independent banks, would be incon­ceivable today. Consolidation enabled banks to benefit from economies of scale. Mr Hess, how did this project come about? Hess: The starting point was the opening of the Swiss Bankers Association’s archives. Simon Amrein then approached us with the idea of conducting in-depth research into selected aspects of Swiss banking history and making the findings accessible to a wider public. Discussions about the financial centre understandably focus on current events, but the long-term perspec­tive is often missing. We therefore commis­sioned and funded the project. It was carried out by the HSLU research team under Simon Amrein’s direction. What makes this dataset special? Amrein: Most historical time series on the development of banks in Switzerland are based on Prof. Franz Ritzmann’s 1973 book and on statistics from the Swiss National Bank. This means that the broad trends in the banking market are well documented. However, the data is mostly available at an aggregated level, grouped into bank categories such as cantonal banks, big banks and savings banks.

There was therefore considerable potential at the level of individual institutions. We can now close much of this gap. We have sought to reconstruct the development of every individual bank, including mergers, takeovers and liquidations. Where possible, we also collected additional information, such as legal form, number of clients and total assets. In all, we compiled around one million data points, probably an unparal­leled level of detail. The charts published by the Swiss Bankers Association provide an initial insight, but the analysis of the data has really only just begun. Were there periods in which the changes were particularly far-reaching? Amrein: Particularly significant periods included industrialisation in the 19th century, the Great Depression in the 1930s and the real estate crisis of the 1990s. In this millennium, the financial crisis and the end of bank-client confidentiality at international level also belong on the list. The Swiss financial centre is associated with stability, but the data shows constant change. How do the two fit together? Hess: Stability does not mean that structures remain unchanged. Banks could not operate profitably today with the structures of the previous century. The big banks evolved from the commercial banks of the 19th century into today’s universal banks. Savings banks are now firmly established in the mortgage business. The banking sector has remained efficient because its institutions have repeatedly adapted to new conditions.

Every change has its own causes and must be examined on its own merits. History does, however, show which developments are genuinely new and where long-term patterns can be identified. The new historical dataset helps us assess change in a more nuanced way. It is an invitation to all of us to base current policy debates on the operating framework more firmly on facts. The discussion of mergers tends to be dominated by the big institutions. Does the database reveal another side of the story? Amrein: Historically, savings banks were particularly affected by mergers and takeovers. Around 100 savings banks were established in Switzerland between 1815 and 1830. Their development was closely linked to industrialisation, as growing numbers of factory workers began to receive wages. This also raised the question of how those wages could be kept safe. Savings banks offered an answer. Factories set up their own savings banks, while cities, communes and cantons also participated in establishing banks by providing equity or guarantees. Savings banks therefore also performed a social function. How did they develop subsequently? Amrein: Absolutely. At the outset, many savings banks also had a non-profit purpose. Enabling people to save with banks allowed large sections of the population to make financial provision for difficult times.

By the end of the 19th century, the number of savings banks had quadrupled, before declining steadily during the 20th century. In 2000, there were once again around 100 savings and regional banks, the same number as in 1830. At the end of 2025, 58 institutions remained. Many not only merged with one another, but were also taken over by big banks and, in some cases, by cantonal banks. What does the history of savings banks tell us about the banking sector as a whole? Hess: It helps us form a more compre­hensive picture of the financial centre. Public debate often focuses on the big banks. They drove economic development by providing large-scale financing to industry. However, history also shows the diversity of the banking sector as a whole. At different times, savings banks, cantonal banks, regional banks and other institutions met different needs, ranging from saving and financial provision to regional financing. What are the limitations of the dataset? Amrein: One central challenge is deter­mining what was historically classified as a bank. In the absence of legal requirements, there was neither a binding definition of a bank nor any obligation to publish annual financial statements. This makes it difficult to find archival material documenting the existence of banks.

Important milestones included the Code of Obligations, which from 1883 required cooperatives and joint-stock companies to publish their accounts, and the 1881 Banknote Act, which required issuing banks to publish monthly information. The Banking Act, which imposed more compre­hensive annual reporting requirements on all banks, did not enter into force until 1934. We have good documentation for the 20th century, but it is difficult to build a complete picture of the 19th century. Swiss Banking is making the findings accessible through a website, an explainer video and other formats. What should readers take away? Amrein: Swiss banking history is extra­ordinarily dynamic and marked by constant change. The constant is the demand for financial services. Banks come and go, but the needs to save, make financial provision, invest and borrow remain. Hess: Our aim is neither to indulge in nostalgia nor to tell a simple success story. We want to provide a factual basis. If readers come away understanding that change has been a defining feature of the Swiss banking sector for more than 300 years, and that its history encompasses far more than the development of individual big banks, we will have achieved a great deal.

I am convinced that this dataset will provide the basis for a wide range of further research, including research into the role of banks in the development of Switzerland’s economy and prosperity.