Federal Council

Advisory Board for Future of Swiss Financial Centre Submits Strategic Roadmap for Financial Market Policy to Federal Council

Federal Council - Strategic Roadmap
Federal Council

Bern, 15.01.2020 – In its last year of operation, the Federal Council‘s strategic roadmap advisory board drew up a financial market policy overview and presented a number of recommendations to the government. The establishment of an effective crisis organisation for cyber-risks is regarded as urgent. Another priority, in the board’s view, is the fiscal liberalisation of the Swiss capital market. The Federal Council was informed about the roadmap during its meeting on 15 January 2020. The recommendations should be integrated into the Confederation’s updated financial market policy, which is due in autumn 2020.

In 2019, its last year of operation, the advisory board carried out an analysis of financial market policy as a whole, with a view to presenting the Federal Council with a roadmap for the strategic priorities in the years to come. The roadmap starts by identifying the key factors for the success of the Swiss financial centre. It then builds on that by means of ten recommendations with varying levels of detail.

The advisory board regards it as a priority that the authorities and financial institutions should jointly and rapidly establish an effective crisis organisation to combat cyber-risks. This view is based on the fact that, for some years now, Switzerland has followed a particularly innovation-friendly approach, providing conditions for fintech development that are excellent by international standards. However, unprofessionally managed major incidents caused by cyberattacks involving contagion could rapidly destroy these very good conditions for the new financial sector technologies in Switzerland. The establishment of preventive measures specifically tailored to the financial market is thus all the more urgent.

Another priority, in the board’s view, is the fiscal liberalisation of the Swiss capital market. Compared to the size of its financial centre, Switzerland’s capital market is rather underdeveloped. The structure of withholding tax has led to large companies issuing most of their bonds abroad. By switching from the withholding tax system to a paying agent tax, as proposed by the Federal Council in 2019, Switzerland could considerably increase its appeal as a venue for such capital market transactions. In the medium term, moreover, the reform of withholding tax on equity issues and of stamp duties could result in the attractiveness of the Swiss financial centre increasing still further.

Other recommendations concern areas such as market access for financial services, the treatment of digital payment methods, the creation of an education and research hub for fintech and cybersecurity, and the consideration of the risks to stability in the environment of extremely low interest rates.

The FDF will present a report updating the Federal Council’s financial market policy by autumn 2020. The last update was in October 2016. The report will examine all the recommendations of the advisory board for the future of the financial centre.

In December 2014, the Federal Council decided to appoint, for a period expiring at the end of 2019, an advisory board charged with assessing the future challenges and prospects for the financial centre from a strategic viewpoint and submitting recommendations for action to it if need be. Led by Professor Aymo Brunetti, the advisory board was comprised of representatives from the authorities and the private sector, as well as academia.