Swiss Banking Secrecy

The Erosion of an Institution
2 / 2008
Marie Lamensch

Abstract

Switzerland has for a long time been an important centre of banking services in Europe and beyond. Consequently, the banking sector has become important to Switzerland’s prosperity. This paper focuses on a central reason behind the success of the Swiss banking sector: the institution of banking secrecy, deeply enshrined in the Swiss history and tradition. The rapid development of international markets that eventually gave rise to a “group structuration process” has, however, progressively eroded Swiss banking secrecy. It has had to bend before the duty of transparency within the groups in order not to promote financial criminality through accelerated asset inflows. Switzerland has also had to develop a comprehensive legislative frame to tackle financial criminality, and to enter into international agreements providing for mutual assistance. This process has undoubtedly and irremediably weakened the Swiss banking secrecy. Most importantly, nevertheless, the questionable ethical and socio-economic grounds of this controversial institution could and should also start to erode it from within.

About the Author

Marie Lamensch is member of the Brussel's bar and currently works as a lawyer for Kremer Associés and Clifford Chance (Luxembourg). She previously worked for Simont Braun (Brussels) and as a teaching assistant at the Université Libre de Bruxelles (ULB). She holds a law degree from the ULB and an LL.M degree (Master in International and Comparative Law) from the Vrije Universiteit Brussel’s (VUB) PILC Program, organized under the auspieces of the Institute for European Studies (IES). The views expressed in this paper are purely personal and do not reflect the position of any of the institutions mentioned above.