(Bloomberg) -- Switzerland’s position as the prime destination for wealth is in jeopardy following the collapse of Credit Suisse, according to a report by Deloitte.
While Switzerland remains the top location for wealth management globally with $2.2 trillion under management, inflows have languished in recent years, the consulting firm said Wednesday.
Switzerland “was rocked by the failure of Credit Suisse in 2023, when huge sums of client money were withdrawn in the space of just a few days,” Deloitte said in the report. The country “remains the leading and preferred booking center for European and Middle Eastern clients, but asset inflows from both these regions are yet to fully recover” from that event, it said.
The traditional advantages of Switzerland, which have included low taxes, political and economic stability, legal certainty and neutrality, have also “lost some of their significance and strength in recent years,” Deloitte said. “The country is now less attractive than it used to be for high-net-worth international banking clients.”
Those trends are in contrast to some competing centers, including the US and Hong Kong. Switzerland’s lead over the UK — the global number two — has shrunk to only about $8 billion from roughly $500 billion in 2020, according to figures from Deloitte.
Last year, Credit Suisse, which was Switzerland’s second-largest bank at the time, was taken over by rival UBS Group AG in an emergency rescue brokered by the Swiss government. The deal followed years of losses and management failures at Credit Suisse.
In order to defend its status in the global wealth market, Switzerland should focus on bolstering its regulatory framework and re-establishing trust, Deloitte said, adding that the country also needs to invest in its digital transformation and on improving efficiency.
(Updates with more details from report in third and fourth paragraph.)
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