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123-502: Banking in Switzerland dates to the early 18th century through Switzerland 's merchant trade and over the centuries has grown into a complex and regulated international industry. Banking is seen as emblematic of Switzerland and the country has been one of the largest offshore financial centers and tax havens in the world since the mid-20th century, with a long history of banking secrecy and client confidentiality reaching back to

246-637: A Swiss person which was in use during the 16th to 19th centuries, and land . The English adjective Swiss is a loanword from French Suisse , also in use since the 16th century. The name Switzer is from the Alemannic Schwiizer , in origin an inhabitant of Schwyz and its associated territory , one of the Waldstätte cantons which formed the nucleus of the Old Swiss Confederacy . The Swiss began to adopt

369-621: A lower house (the National Council , with representatives elected from across the country). Referendums were made mandatory for any amendments. This new constitution ended the legal power of nobility in Switzerland . A single system of weights and measures was introduced, and in 1850 the Swiss franc became the Swiss single currency , complemented by the WIR franc in 1934. Article 11 of

492-676: A national personification of the Swiss confederacy in the 17th century in a 1672 play by Johann Caspar Weissenbach. The state of Switzerland took its present form with the adoption of the Swiss Federal Constitution in 1848. Switzerland's precursors established a defensive alliance in 1291, forming a loose confederation that persisted for centuries. The oldest traces of hominid existence in Switzerland date to about 150,000 years ago. The oldest known farming settlements in Switzerland, which were found at Gächlingen , date to around 5300 BC. The earliest known tribes formed

615-522: A 2005 net income of CHF810 million. Switzerland in Europe  (green and dark grey) Switzerland , officially the Swiss Confederation , is a landlocked country located in west-central Europe . It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland is geographically divided among

738-473: A Swiss bank and for years deposited his Havana casino take in Miami accounts, then wired the funds to Switzerland via a network of shell and holding companies and offshore accounts. Economist and Nobel Prize laureate Joseph Stiglitz , told Komisar: You ask why, if there's an important role for a regulated banking system, do you allow a non-regulated banking system to continue? It's in the interest of some of

861-559: A banking system after the collapse of Credit Suisse , acquired by the Swiss competitor UBS , and the way the affair was handled by the Swiss National Bank . Switzerland is a prosperous nation with a per capita gross domestic product higher than that of most Western European nations. The value of the Swiss franc (CHF) has been relatively stable compared with that of many others. Swiss neutrality and national sovereignty , long recognized by foreign nations, have fostered

984-517: A change of policy following threats from Germany. Over 100 Allied bombers and their crews were interned. Between 1940 and 1945, Switzerland was bombed by the Allies , causing fatalities and property damage. Among the cities and towns bombed were Basel , Brusio , Chiasso , Cornol , Geneva, Koblenz , Niederweningen , Rafz , Renens , Samedan , Schaffhausen , Stein am Rhein , Tägerwilen , Thayngen , Vals , and Zurich. Allied forces maintained that

1107-743: A client's consent. The law, coupled with a stable Swiss currency and international neutrality, prompted large capital flight to private Swiss accounts. During the 1940s, numbered bank accounts were introduced creating an enduring principle of bank secrecy that continues to be considered one of the main aspects of private banking globally. Advances in financial cryptography (via public-key cryptography ) could make it possible to use anonymous electronic money and anonymous digital bearer certificates for financial privacy and anonymous Internet banking, given enabling institutions and secure computer systems. While some banking institutions voluntarily impose banking secrecy institutionally, others operate in regions where

1230-459: A dominant role in the Swiss economy and society. According to the Organization for Economic Cooperation and Development (OECD), total banking assets amount to 467% of total gross domestic product. Banking in Switzerland has been portrayed , with varying degrees of accuracy, in overall popular culture and television shows. In 2023 Switzerland lost much credibility as a banking centre after

1353-536: A financial crime to the client's account. The disclosed information can only be used for tax auditing and Swiss authorities may prevent disclosure. In December 2017, the Swiss parliament launched a standing initiative and expressed an interest in formally embedding banking secrecy within the Swiss Constitution , making it a federally-protected constitutional right . In January 2018, a U.S. district court ruled that Swiss bankers "[have] nothing to do with

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1476-414: A major extent by only four people, namely: Christoph Meili (1997), Bradley Birkenfeld (2007), Rudolf Elmer (2011) and Hervé Falciani (2014). The Swiss Bankers Association (SBA) estimated in 2018 that Swiss banks held US$ 6.5 trillion in assets or 25% of all global cross-border assets. Switzerland's main lingual hubs, Geneva (for French), Lugano (for Italian), and Zürich (for German) service

1599-548: A natural environment in which to excavate underground vaults for storage of gold and diamonds. In the 1910s, during World War I , Swiss bankers traveled to France to advertise the country's banking secrecy. The war's contribution to political and economic instability sparked a rapid capital movement into Switzerland. As European countries began to increase taxes to finance the war , wealthy clients moved their holdings into Swiss accounts to avoid taxation. The French banked in Geneva,

1722-512: A particular financial institution or country. Furthermore, lawyers in Switzerland can refuse to disclose almost anything to the authorities about their clients. Under the Swiss Anti-Money Laundering Act, banks must report suspicious clients and transactions to the authorities. Lawyers and other advisors have no such obligation if they simply create trusts and other constructs rather than handle assets. According to

1845-690: A remarkable size, while hundreds of agricultural estates ( Villae rusticae ) were established in the countryside. Around 260 AD, the fall of the Agri Decumates territory north of the Rhine transformed today's Switzerland into a frontier land of the Empire. Repeated raids by the Alamanni tribes provoked the ruin of the Roman towns and economy, forcing the population to shelter near Roman fortresses, like

1968-492: A series of proposed financial regulations seeking to limit bank secrecy, but with little resulting action. Despite various international efforts to roll back banking secrecy laws in the country which were largely minimized or reverted by Swiss social and political forces, in 2017 Switzerland agreed to "automatic exchange of information" (AEOI) with foreign governments and their revenue services regarding information of depositors not resident in Switzerland. This constituted de facto

2091-536: A sign of support. In September 2020, a referendum calling for a vote to end the pact that allowed a free movement of people from the European Union was introduced by the Swiss People's Party (SVP). However, voters rejected the attempt to retake control of immigration, defeating the motion by a roughly 63%–37% margin. On 9 February 2014, 50.3% of Swiss voters approved a ballot initiative launched by

2214-405: A significant impact on the psychology and society of Switzerland. The war convinced most Swiss of the need for unity and strength. Swiss from all strata of society, whether Catholic or Protestant, from the liberal or conservative current, realised that the cantons would profit more from merging their economic and religious interests. Thus, while the rest of Europe saw revolutionary uprisings ,

2337-515: A stable environment for the banking sector to develop and thrive. Switzerland maintained neutrality through both World Wars , is not a member of the European Union or NATO , and did not join the United Nations until 2002. The Bank of International Settlements (BIS), an organization that facilitates cooperation among the world's central banks , is headquartered in Basel . Founded in 1930,

2460-580: A weak pound sterling in 1964, Swiss bankers began using the title as proof of their financial skill and adherence to secrecy. Throughout the 1980s and 1990s, numerous international proposals for bank secrecy rollbacks were made by foreign states with little success. After the 2008 financial crisis , Switzerland signed the European Union Savings Directive (EUSD) which obliges Swiss banks to report to 43 European countries non-identifying annual tax statistics. On December 3, 2008,

2583-556: A whole rather than being modified one amendment at a time. This need soon proved itself when the rise in population and the Industrial Revolution that followed led to calls to modify the constitution accordingly. The population rejected an early draft in 1872, but modifications led to its acceptance in 1874. It introduced the facultative referendum for laws at the federal level. It also established federal responsibility for defence, trade, and legal matters. In 1891,

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2706-640: Is Switzerland's largest bank. It maintains seven main offices around the world (four in the United States and one each in London, Tokyo, and Hong Kong) and branches on five continents. UBS has been at the center of various tax evasion investigations and other criminal investigations since its founding. UBS was fined $ 100 million by the Federal Reserve in 2004 for trading in dollars with Iran and other sanctioned countries. Credit Suisse Group

2829-831: Is anything the Swiss take more seriously than the precision of their watches or the quality of their chocolate , it's the secrecy of their banks. Steve Kroft , host of Banking: A Crack In the Swiss Vault In November 2013, the Zürcher Kantonalbank was classified as a systemically important bank in Switzerland by order of the Swiss National Bank (SNB), alongside UBS , Credit Suisse , Raiffeisen (Switzerland) and PostFinance , and must meet stricter capital requirements and prepare contingency plans for times of crisis. In another step toward loosening banking secrecy, Switzerland signed

2952-726: Is argued that these financial centers enable the actions of criminals. However, there have been attempts by global institutions to regulate money laundering and illegal activities. Numbered bank accounts , used by Swiss banks and other offshore banks located in tax havens, have been accused by the international community of being a major instrument of the underground economy, facilitating tax evasion and money laundering. After Al Capone 's 1931 condemnation for tax evasion, according to journalist Lucy Komisar : mobster Meyer Lansky took money from New Orleans slot machines and shifted it to accounts overseas. The Swiss secrecy law two years later assured him of G-man -proof-banking. Later, he bought

3075-468: Is considered the confederacy's founding document, even though similar alliances likely existed decades earlier. The document was agreed among the rural communes of Uri , Schwyz , and Unterwalden . By 1353, the three original cantons had joined with the cantons of Glarus and Zug and the Lucerne , Zurich and Bern city-states to form the "Old Confederacy" of eight states that obtained through

3198-535: Is demanding that lawyers, financial advisors plus real estate and art transactions be subject to the same exacting anti-money laundering measures as banks. The "enabling industry" refers to lawyers, fiduciaries, notaries, and real estate agents who assist criminals in investing or hiding their ill-gotten wealth. Their activity is not covered by the Swiss Anti-Money Laundering Act as long as they are only advising clients to place money in

3321-975: Is derived from the Swiss Financial Market Supervision Act (FINMASA) and Article 98 of the Swiss Federal Constitution. The office of the Swiss Banking Ombudsman , founded in 1993, is sponsored by the Swiss Banking Ombudsman Foundation, which was established by the Swiss Bankers Association . The ombudsman's services, which are offered free of charge, include mediation and assistance to persons searching for dormant assets. The ombudsman handles about 1,500 complaints raised against banks yearly. Generally speaking, lawyers will not work against

3444-419: Is fairly cohesive, being rooted in a common historical background, shared values such as federalism and direct democracy , and Alpine symbolism. Swiss identity transcends language, ethnicity, and religion, leading to Switzerland being described as a Willensnation ("nation of volition") rather than a nation state . The English name Switzerland is a portmanteau of Switzer , an obsolete term for

3567-928: Is the birthplace of the Red Cross and hosts the headquarters or offices of most major international institutions including the WTO , the WHO , the ILO , FIFA , the WEF , and the UN. It is a founding member of the European Free Trade Association (EFTA), but not part of the European Union (EU), the European Economic Area , or the eurozone ; however, it participates in the European single market and

3690-659: Is the highest, although the Matterhorn (4,478 m or 14,692 ft) is the best known. Both are located within the Pennine Alps in the canton of Valais , on the border with Italy. The section of the Bernese Alps above the deep glacial Lauterbrunnen valley, containing 72 waterfalls, is well known for the Jungfrau (4,158 m or 13,642 ft) Eiger and Mönch peaks, and its many picturesque valleys. In

3813-542: The Axis and Allied powers. Switzerland's trade was blockaded by both the Allies and the Axis. Economic cooperation and extension of credit to Nazi Germany varied according to the perceived likelihood of invasion and the availability of other trading partners. Concessions reached a peak after a crucial rail link through Vichy France was severed in 1942, leaving Switzerland (together with Liechtenstein ) entirely isolated from

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3936-581: The Axis powers by storing gold and cash balances in underground vaults, buying gold from the Nazi German state, and lending to both Germany and Italy, thus supporting their aggressive endeavors. Adolf Hitler maintained an account at the Union Bank of Switzerland (UBS) estimated at 1.1 billion  ℛ︁ℳ︁ . After the United States formally asked the bank to transfer the money in

4059-628: The Castrum Rauracense near Augusta Raurica. The Empire built another line of defence at the north border (the so-called Donau-Iller-Rhine-Limes). At the end of the fourth century, the increased Germanic pressure forced the Romans to abandon the linear defence concept. The Swiss Plateau was finally open to Germanic tribes . In the Early Middle Ages , from the end of the fourth century, the western extent of modern-day Switzerland

4182-624: The Congress of Vienna formally established Switzerland's international neutrality , which led to a large capital influx. The wealthy, landlocked Switzerland saw banking secrecy as a way to build an empire similar to that of France , Spain , and the United Kingdom . Swiss historian Sébastian Guex notes in The Origins of Secret Swiss Bank Accounts : This is what the Swiss bourgeoisie are thinking: "That's our future. We will play on

4305-503: The Congress of Vienna fully re-established Swiss independence, and the European powers recognised permanent Swiss neutrality. Swiss troops served foreign governments until 1860 when they fought in the siege of Gaeta . The treaty allowed Switzerland to increase its territory, with the admission of the cantons of Valais , Neuchâtel and Geneva . Switzerland's borders saw only minor adjustments thereafter. The restoration of power to

4428-528: The Federal Assembly increased the prison sentence for violations of banking secrecy from a maximum of six months to five years. In late 2008, after an international, multi-state investigation into Switzerland's role in U.S. tax evasion, UBS entered into a limited, deferred prosecution agreement (DPA) with the U.S. Department of Justice . The agreement initiated the landmark Birkenfeld Disclosure of information on more than 4,000 clients. If there

4551-710: The Federal Banking Commission . As of 2023 only one in five Swiss people banks with either UBS or Credit Suisse, but most Swiss prefer one or the other. Credit Suisse was historically the bank of Protestant Zürich; UBS originated in Catholic Basel, near France. The Swiss National Bank (SNB) serves as the country's central bank . Founded by the Federal Act on the Swiss National Bank (16 January 1906), it began conducting business on 20 June 1907. Its shares are publicly traded, and are held by

4674-717: The Federal Charter of 1291 is considered the country's founding document. Swiss independence from the Holy Roman Empire was formally recognised in the Peace of Westphalia in 1648. Switzerland has maintained a policy of armed neutrality since the 16th century and has not fought an international war since 1815 . It joined the United Nations only in 2002 but pursues an active foreign policy that includes frequent involvement in peace building . Switzerland

4797-680: The Federal Palace in 1902 and after 1948 used in the official seal (e.g., the ISO banking code "CHF" for the Swiss franc , the Swiss postage stamps ('HELVETIA') and the country top-level domain ".ch", are both taken from the state's Latin name). Helvetica is derived from the Helvetii , a Gaulish tribe living on the Swiss Plateau before the Roman era . Helvetia appeared as

4920-620: The Federal Supreme Court ; and a 1932 campaign against tax evasion in France led by Édouard Herriot 's government. Alleged wealthy French tax evaders included military generals and Catholic bishops . An additional provision , Article 47(b), was drafted before its ratification to protect Jewish assets from the Nazi party. During World War II , Switzerland remained diplomatically neutral but its economy and financial system served

5043-677: The First War of Villmergen , in 1656, and the Toggenburg War (or Second War of Villmergen), in 1712. In 1798, the revolutionary French government invaded Switzerland and imposed a new unified constitution. This centralised the government of the country, effectively abolishing the cantons: moreover, Mülhausen left Switzerland and the Valtellina valley became part of the Cisalpine Republic . The new regime, known as

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5166-577: The Hallstatt and La Tène cultures , named after the archaeological site of La Tène on the north side of Lake Neuchâtel . La Tène culture developed and flourished during the late Iron Age from around 450 BC, possibly influenced by Greek and Etruscan civilisations. One of the most prominent La Tène tribes were the Helvetii , who primarily occupied the Swiss Plateau , alongside the Rhaetians in

5289-548: The Holy Roman Empire around 1000 AD. In the 10th century, as the rule of the Carolingians waned, Magyars destroyed Basel in 917 and St. Gallen in 926. In response, Henry the Fowler , the then ruler of East Francia, decreed the fortification of key settlements to defend against these invasions. Large villages and towns, including strategic locations like Zurich and St.Gallen, were fortified. This initiative led to

5412-668: The IRS as "offshore financial institutions". The IRS issues the entities unique Global Intermediary Identification Numbers, or GIINs, which relieve the banks of FATCA 's requirement to investigate whether they're held by Americans. This loophole was allegedly used by billionaire Robert Brockman to avoid taxation . The banking systems of Switzerland and Liechtenstein have close ties. Liechtenstein's trust companies are clients of Swiss banks. Liechtenstein does not require trust companies to identify people with signatory powers, and does not prosecute tax evasion or tax fraud (2000). To improve

5535-593: The League of Nations , which was based in Geneva , after it was exempted from military requirements. During World War II , detailed invasion plans were drawn up by the Germans, but Switzerland was never attacked. Switzerland was able to remain independent through a combination of military deterrence, concessions to Germany, and good fortune, as larger events during the war intervened. General Henri Guisan , appointed

5658-600: The Schengen Area . Switzerland is a federal republic composed of 26 cantons , with federal authorities based in Bern . Switzerland is one of the world's most developed countries having the highest nominal wealth per adult , and the eighth-highest gross domestic product (GDP) per capita . Switzerland performs highly on several international metrics , including economic competitiveness and democratic governance . Cities such as Zurich, Geneva and Basel rank among

5781-576: The Swiss Alps to the south, the Swiss Plateau or Central Plateau, and the Jura mountains on the west. The Alps are a mountain range running across the central and south of the country, constituting about 60% of the country's area. The majority of the population live on the Swiss Plateau. The Swiss Alps host many glaciers, covering 1,063 square kilometres (410 sq mi). From these originate

5904-458: The Swiss Plateau , the Alps and the Jura ; the Alps occupy the greater part of the territory, whereas most of the country's population of 9 million are concentrated on the plateau, which hosts its largest cities and economic centres, including Zurich , Geneva , and Basel . Switzerland originates from the Old Swiss Confederacy established in the Late Middle Ages , following a series of military successes against Austria and Burgundy ;

6027-416: The Swiss economy . During the Cold War , Swiss authorities considered the construction of a Swiss nuclear bomb . Leading nuclear physicists at the Federal Institute of Technology Zurich such as Paul Scherrer made this a realistic possibility. In 1988, the Paul Scherrer Institute was founded in his name to explore the therapeutic uses of neutron scattering technologies. Financial problems with

6150-476: The cantons , cantonal banks, and individual investors; the federal government does not hold any shares. Although a central bank often has regulatory authority over the country's banking system, the SNB does not; regulation is solely the role of the Federal Banking Commission. Raiffeisen Banks "assumes the role of central bank" in providing treasury services, and is the third largest group consisting of 328 banks in 2011, 390 in 2012 with 1,155 branches. According to

6273-405: The commander-in-chief for the duration of the war ordered a general mobilisation of the armed forces. The Swiss military strategy changed from static defence at the borders to organised long-term attrition and withdrawal to strong, well-stockpiled positions high in the Alps, known as the Reduit . Switzerland was an important base for espionage by both sides and often mediated communications between

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6396-466: The "Two Big Banks" down to small banks serving the needs of a single community or a few special clients. The largest and second largest Swiss banks are UBS Group AG and Credit Suisse Group AG , respectively. They account for over 50% of all deposits in Switzerland; each has extensive branch networks throughout the country and most international centers. Due to their size and complexity, UBS and Credit Suisse are subject to an extra degree of supervision from

6519-487: The 1990s, UBS wired US$ 400 to 700 million worth of Reichsmarks to U.S. authorities. Banking regulations in Switzerland limit the amount of orphaned assets allowed to leave a bank's custody. UBS, with consent from the Swiss government , froze the account containing Hitler's assets indefinitely, and clipped the Reichsmarks, stripping the currency of value. During World War II , UBS also maintained accounts for hundreds of German Jewish businesspeople and households. After

6642-643: The BIS chose to locate in Switzerland because of the country's neutrality , which was important to the organization founded by countries that had been enemies in World War I. Banking has played a dominant role in the Swiss economy for two centuries. According to the Organization for Economic Co-operation and Development (OECD), total banking assets amount to 467% of total gross domestic product. Swiss banks managed $ 2.4 trillion (CHF2.1 trillion) of assets belonging to wealthy foreigners in 2022, more than any other country and before Hong Kong ($ 2.2T) or Singapore ($ 1.5T) who are ranked 2nd and 3rd respectively, according to

6765-470: The Banking Law of 1934 : those who disclose client information are subject to a maximum of five years' imprisonment and 250,000 francs ( € 215,000 or US$ 250,000) in fines. Whistleblowers and leakers of client information often face hostility from the public and sustain professional setbacks. Denounced as a criminal in Switzerland, a federal arrest warrant has been in place for Bradley Birkenfeld since 2008, after he disclosed UBS client information to

6888-514: The Banking Law of 1934 was passed, the bank aggressively protected assets of the " enemies of Nazi Germany ". When Hitler announced an (aborted) invasion of Switzerland in 1940, UBS contracted the Swiss Armed Forces to blockade their retail banks and transport Jewish assets to underground military bunkers. The Swiss Bank Corporation (SBC) and Credit Suisse , did likewise. After the end of World War II , Switzerland and its financial system benefited greatly from having remained unharmed while all

7011-428: The Bold of Burgundy during the 1470s, and the success of the Swiss mercenaries . The Swiss victory in the Swabian War against the Swabian League of Emperor Maximilian I in 1499 amounted to de facto independence within the Holy Roman Empire . In 1501, Basel and Schaffhausen joined the Old Swiss Confederacy. The Confederacy acquired a reputation of invincibility during these earlier wars, but expansion of

7134-560: The EU was attained that eliminated quotas on EU citizens, but still allowed favourable treatment of Swiss-based job applicants. On 27 September 2020, 62% of Swiss voters rejected the anti-free movement referendum by SVP. Extending across the north and south side of the Alps in west -central Europe, Switzerland encompasses diverse landscapes and climates across its 41,285 square kilometres (15,940 sq mi). Switzerland lies between latitudes 45° and 48° N , and longitudes 5° and 11° E . It contains three basic topographical areas:

7257-416: The French in the name of the Helvetic Republic. In 1803 Napoleon organised a meeting of the leading Swiss politicians from both sides in Paris. The Act of Mediation was the result, which largely restored Swiss autonomy and introduced a Confederation of 19 cantons. Henceforth, much of Swiss politics would concern balancing the cantons' tradition of self-rule with the need for a central government. In 1815

7380-519: The Helvetic Republic, was highly unpopular. An invading foreign army had imposed and destroyed centuries of tradition, making Switzerland nothing more than a French satellite state . The fierce French suppression of the Nidwalden Revolt in September 1798 was an example of the oppressive presence of the French Army and the local population's resistance to the occupation. When war broke out between France and its rivals, Russian and Austrian forces invaded Switzerland. The Swiss refused to fight alongside

7503-472: The Helvetii were forced by Caesar to return to their original lands, where they were subjected to stringent restrictions on their autonomy and movements. In 15 BC, Tiberius (later the second Roman emperor) and his brother Drusus conquered the Alps, integrating them into the Roman Empire . The area occupied by the Helvetii first became part of Rome's Gallia Belgica province and then of its Germania Superior province. The eastern portion of modern Switzerland

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7626-403: The Holy Roman Empire and its neutrality . During the Early Modern period of Swiss history, the growing authoritarianism of the patriciate families combined with a financial crisis in the wake of the Thirty Years' War led to the Swiss peasant war of 1653 . In the background to this struggle, the conflict between Catholic and Protestant cantons persisted, erupting in further violence at

7749-400: The IRS, Swiss law prohibits the disclosure. If a client does consent, Swiss banks send the IRS tax-related information about the account holder but are prohibited from disclosing identities pursuant to Article 47 of the Banking Law of 1934. The 2018 Financial Secrecy Index stated: "this [does] not mean that Swiss banking secrecy was finished, as some excitable news reports suggest... the breach

7872-523: The Italians in Lugano , and the Germans in Zürich . The Federal Act on Banks and Savings Banks , colloquially known as the Banking Law of 1934, made the violation of banking secrecy a federal criminal offence. That major step beyond the prior enforcement of banking secrecy under civil law resulted from several developments of the early 1930s, including the introduction in the same legislation of an embryonic form of banking supervision, which Swiss bankers argued could endanger secrecy; evolving jurisprudence of

7995-405: The Money Laundering Reporting Office Switzerland in 2017, official " suspicious activity reports " reached nearly 4,700 (worth $ 16.2 billion) up from 2,909 reported cases in 2016. The Swiss Financial Services Act of 2020 (FinSA) requires financial advisers to obtain a licence (950 firms advising on nearly $ 200 billion have been approved by FINMA ). The law also requires any "retrocession" paid by

8118-440: The Swiss Alps. 90% of Switzerland's 65,000-kilometre-long network of rivers and streams have been straightened, dammed, canalized or channeled underground, in an effort to prevent natural disasters such as flooding, landslides, and avalanches. 80% of all Swiss drinking water comes from groundwater sources. Forty-eight mountains are 4,000 metres (13,000 ft) or higher in height. At 4,634 m (15,203 ft), Monte Rosa

8241-407: The Swiss People's Party (SVP/UDC) to restrict immigration . This initiative was mostly backed by rural (57.6% approval) and suburban groups (51.2% approval), and isolated towns (51.3% approval) as well as by a strong majority (69.2% approval) in Ticino, while metropolitan centres (58.5% rejection) and the French-speaking part (58.5% rejection) rejected it. In December 2016, a political compromise with

8364-435: The Swiss authorities. Swiss banks are obliged to reject or terminate business relationships if there are doubts about the real identity of the owner of the account. Swiss banks have a legal obligation to record the ultimate beneficial owners of all assets they handle worldwide, but doing so accurately can be tricky in jurisdictions where it is easy for third parties to mask who the owners are . Thus, loopholes exist through

8487-442: The Swiss drew up a constitution that provided for a federal layout , much of it inspired by the American example . This constitution provided central authority while leaving the cantons the right to self-government on local issues. Giving credit to those who favoured the power of the cantons (the Sonderbund Kantone), the national assembly was divided between an upper house (the Council of States , two representatives per canton) and

8610-429: The U.S. Foreign Account Tax Compliance Act (FATCA), after rejecting it twice in parliament. The FATCA requires Swiss banks to disclose non-identifying U.S. client information annually to the Internal Revenue Service . The agreement does not guarantee the semi-automatic information transfers, which remain at the discretion of Swiss government authorities. If a client does not consent to having their information shared with

8733-417: The U.S. Internal Revenue Service in 2007. After the 2008 financial crisis , the Swiss Parliament initiated a series of international tax treaties that rolled back banking secrecy protections for foreign clients in response to pressure from the European Union , United States, and United Kingdom . As of 2018, there are more than 400 securities dealers and banking institutions in Switzerland , ranging from

8856-642: The US. In July 2019, the US Senate approved the Double Taxation Treaty (DTA) with Switzerland, which had already been accepted by the Swiss parliament in 2010. The new agreement, applicable to accounts from September 23, 1999, onward, amends the tax treaty of 1996 and regulates requests for information on financial accounts by US authorities, as well as exemptions for retirement savings by US persons. Starting in 2019, Switzerland began to share (with

8979-568: The area of forest that was burned and cleared to build. The name was extended to the area dominated by the canton, and after the Swabian War of 1499 gradually came to be used for the entire Confederation. The Swiss German name of the country, Schwiiz , is homophonous to that of the canton and the settlement, but distinguished by the use of the definite article ( d'Schwiiz for the Confederation, but simply Schwyz for

9102-602: The bank in 2012 non-U.S. businesses of Wegelin & Co , the oldest Swiss bank, would be bought by the Raiffeisen group. The group has 3 million plus clients within Switzerland. Capital ownership of UBS by country of origin as of 2014 UBS Group AG came into existence in June 1998, when Union Bank of Switzerland , founded in 1862, and Swiss Bank Corporation , founded in 1872, merged . Headquartered in Zürich and Basel , it

9225-430: The bank to the advisor to be disclosed publicly. Under current rules, banking institutions and cantonal authorities can only report what is in their registers; looking into the origins of assets or connections between individuals is not permitted. For example, in 2022, a Russian oligarch reportedly handed his Swiss company over to his wife to avoid the sanctions against Russia . Swiss authorities can freeze assets if

9348-774: The banks and regulators are "too weak" to act in case of a problem, according to the Financial Times of London. In February 2013, the Swiss Federal Council allowed the signing of the Foreign Account Tax Compliance Act (FATCA) with the US. These agreements force all Swiss banks to inform the Internal Revenue Service of undeclared, offshore accounts. These new regulations are applicable from 2014, and in turn assure Swiss banks of continued operations within

9471-493: The bombings, which violated the 96th Article of War , resulted from navigation errors, equipment failure, weather conditions, and pilot errors. The Swiss expressed fear and concern that the bombings were intended to put pressure on Switzerland to end economic cooperation and neutrality with Nazi Germany. Court-martial proceedings took place in England. The US paid SFR 62M for reparations. Switzerland's attitude towards refugees

9594-543: The canton and the town). The long [iː] of Swiss German is historically and still often today spelled ⟨y⟩ rather than ⟨ii⟩ , preserving the original identity of the two names even in writing. The Latin name Confoederatio Helvetica was neologised and introduced gradually after the formation of the federal state in 1848, harking back to the Napoleonic Helvetic Republic . It appeared on coins from 1879, inscribed on

9717-479: The cantonal banks account for about 30% of the banking sector in Switzerland, with a network of over 800 branches and 16 000 employees in Switzerland. In 2014 consolidated total assets of all cantonal banks accounted around 500 bln CHF, which is comparable with those of one the "Big Banks", UBS and Credit Suisse. The largest cantonal bank, the Zurich Cantonal Bank , has approximately 5 000 employees had

9840-503: The center of various tax evasion investigations or money laundering activities since its founding. Credit Suisse collapsed in 2023 and it was acquired by UBS the same year . The term private bank refers to a bank that offers private banking services and in its legal form is a partnership. The first private banks were created in St. Gallen in the mid-18th century and in Geneva in the late 18th century as partnerships, and some are still in

9963-565: The choice that an American taxpayer makes to not declare offshore assets", later clarifying they should not be seen as facilitating tax evasion but rather provide a legal service that is made illegal by the client. The Swiss Justice Ministry announced in March 2018 that disclosure of client information in a pending court case involving a Swiss bank is subject to federal espionage and extortion charges in addition to charges relating to banking secrecy laws. In 2023, Switzerland lost credibility as

10086-603: The citizens, the membership application was withdrawn. Nonetheless, Swiss law is gradually changing to conform with that of the EU, and the government signed bilateral agreements with the European Union. Switzerland, together with Liechtenstein, has been surrounded by the EU since Austria's entry in 1995. On 5 June 2005, Swiss voters agreed by a 55% majority to join the Schengen treaty , a result that EU commentators regarded as

10209-569: The collapse of Credit Suisse , one of the largest Swiss banks, subsequently acquired by its Swiss competitor UBS , and due to the inept way the affair was handled by the Swiss National Bank . Bank secrecy in the Swiss region can be traced to the Great Council of Geneva , which outlawed the disclosure of information about the European upper class in 1713. During the 1780s, Swiss bank accounts began insuring deposits , which contributed to their reputation for financial security . In 1815,

10332-525: The confederation suffered a setback in 1515 with the Swiss defeat in the Battle of Marignano . This ended the so-called "heroic" epoch of Swiss history. The success of Zwingli 's Reformation in some cantons led to inter-cantonal religious conflicts in 1529 and 1531 ( Wars of Kappel ). It was not until more than one hundred years after these internal wars that, in 1648, under the Peace of Westphalia , European countries recognised Switzerland's independence from

10455-526: The constitution forbade sending troops to serve abroad, marking the end of foreign service. It came with the expectation of serving the Holy See , and the Swiss were still obliged to serve Francis II of the Two Sicilies with Swiss Guards present at the siege of Gaeta in 1860 . An important clause of the constitution was that it could be entirely rewritten, if necessary, thus enabling it to evolve as

10578-561: The constitution was revised with uncommonly strong elements of direct democracy , which remain unique today. Switzerland was not invaded during either of the world wars. During World War I , Switzerland was home to the revolutionary and founder of the Soviet Union Vladimir Illych Ulyanov ( Vladimir Lenin ) who remained there until 1917. Swiss neutrality was seriously questioned by the short-lived Grimm–Hoffmann affair in 1917. In 1920, Switzerland joined

10701-493: The contradictions between the European powers and, protected by the shield of our neutrality, our arm will be industry and finance." After a small scale civil war in the 1840s between the Swiss cantons , the Swiss Federation was founded in 1848. The formation of the state, through a direct democracy , contributed to the political stability needed for banking secrecy. The mountainous terrain of Switzerland provided

10824-569: The country of origin or residence) the details of 3.1 million bank accounts held by foreigners, as part of the agreed automatic exchange of information. Swiss banks, insurance companies and trusts have a legal obligation to comply but charitable Swiss foundations are so far exempt. As of 2019, Switzerland received financial data from 75 countries and shared data with 63 (over 100 countries starting in 2023) representing 3.6 million accounts as of 2023. Around 9000 banks, insurers, trusts and other financial institutions in Switzerland provide this information to

10947-610: The defence budget and ethical considerations prevented the substantial funds from being allocated, and the Nuclear Non-Proliferation Treaty of 1968 was seen as a valid alternative. Plans for building nuclear weapons were dropped by 1988. Switzerland joined the Council of Europe in 1963. Switzerland was the last Western republic (the Principality of Liechtenstein followed in 1984) to grant women

11070-541: The development of what were essentially early urban strongholds and city governments in Eastern Switzerland. By 1200, the Swiss Plateau comprised the dominions of the houses of Savoy , Zähringer , Habsburg , and Kyburg . Some regions ( Uri , Schwyz , Unterwalden , later known as Waldstätten ) were accorded the Imperial immediacy to grant the empire direct control over the mountain passes. With

11193-592: The different geographical markets. It currently ranks number two behind the United States and on par with Singapore in the Financial Secrecy Index . The banks are regulated by the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB) which derives its authority from a series of federal statutes. Banking in Switzerland has historically played, and still continues to play,

11316-586: The early 1700s. Starting as a way to protect wealthy European banking interests, Swiss banking secrecy was codified in 1934 with the passage of a landmark federal law, the Federal Act on Banks and Savings Banks . These laws were used to protect assets of persons being persecuted by Nazi authorities but have also been used by people and institutions seeking to illegally evade taxes , hide assets, or to commit other financial crime . Controversial protection of foreign accounts and assets during World War II sparked

11439-479: The eastern regions. Facing pressures from Germanic tribes, in 58 BC, the Helvetii, influenced by Orgetorix , a wealthy aristocrat, decided to abandon the Swiss Plateau for better opportunities in western Gallia. After Orgetorix's mysterious death, the tribe continued their migration but was decisively defeated by Julius Caesar's armies at the Battle of Bibracte , in present-day eastern France. Following their defeat,

11562-459: The end of Swiss banking secrecy for depositors who were not Swiss residents. Furthermore, after Switzerland ratified the Foreign Account Tax Compliance Act agreement with the U.S.A., because of concerns regarding their tax liability (the U.S. taxes its citizens regardless of whether they are resident in the USA or not) some Swiss banks have gone so far as to close accounts held by US citizens, and to ban

11685-683: The end of the 15th century. The expansion led to increased power and wealth for the confederation. By 1460, the confederates controlled most of the territory south and west of the Rhine to the Alps and the Jura mountains , and the University of Basel was founded (with a faculty of medicine) establishing a tradition of chemical and medical research. This increased after victories against the Habsburgs ( Battle of Sempach , Battle of Näfels ), over Charles

11808-640: The extinction of its male line in 1263, the Kyburg dynasty fell in AD 1264. The Habsburgs under King Rudolph I (Holy Roman Emperor in 1273) laid claim to the Kyburg lands and annexed them, extending their territory to the eastern Swiss Plateau. The Old Swiss Confederacy was an alliance among the valley communities of the central Alps. The Confederacy was governed by nobles and patricians of various cantons who facilitated management of common interests and ensured peace on mountain trade routes. The Federal Charter of 1291

11931-684: The hands of the original families such as Hottinger and Mirabaud . In Switzerland, such private banks are called "private bankers" (in the local languages, a protected term) to distinguish them from the other private banks which are typically shared corporations. Historically in Switzerland a minimum of CHF1 million was required to open an account, however, over the last years many private banks have lowered their entry hurdles to CHF250,000 for private investors. There are, as of 2006, 24 cantonal banks ; these banks are state-guaranteed semi-governmental organizations controlled by one of Switzerland's 26 cantons that engage in all banking businesses. Together

12054-661: The headwaters of several major rivers, such as the Rhine , Inn , Ticino and Rhône , which flow in the four cardinal directions, spreading across Europe. The hydrographic network includes several of the largest bodies of fresh water in Central and Western Europe, among which are Lake Geneva (Lac Léman in French), Lake Constance (Bodensee in German) and Lake Maggiore . Switzerland has more than 1500 lakes and contains 6% of Europe's freshwater stock. Lakes and glaciers cover about 6% of

12177-413: The highest in terms of quality of life, albeit with some of the highest costs of living . Switzerland holds an international reputation for its established banking sector, alongside its distinctive recognition for their watchmaking and chocolate production. It has four main linguistic and cultural regions: German, French, Italian and Romansh . Although most Swiss are German-speaking, national identity

12300-612: The last widely recognised state without full UN membership. Switzerland is a founding member of the EFTA but not the European Economic Area (EEA). An application for membership in the European Union was sent in May 1992, but did not advance since rejecting the EEA in December 1992 when Switzerland conducted a referendum on the EEA. Several referendums on the EU issue ensued; due to opposition from

12423-555: The law requires them to. However, seizing assets is only permitted in cases involving crime or for destituted potentates . At least a dozen destitute autocrats have had their assets frozen or seized by the Swiss government over the years. The amounts can be counted in billions of dollars. According to the Swiss media , some of the amounts have not yet been restituted to the people of the countries of origin to whom it properly belongs. Breaches of banking secrecy laws in Switzerland are automatically processed pursuant to Article 47 of

12546-503: The moneyed interests to allow this to occur. It's not an accident; it could have been shut down at any time. If you said the US, the UK, the major G7 banks will not deal with offshore bank centers that don't comply with G7 banks regulations, these banks could not exist. They only exist because they engage in transactions with standard banks. Further research in politics is needed to gain a better understanding of banking secrecy. For instance,

12669-629: The name for themselves after the Swabian War of 1499, used alongside the term for "Confederates", Eidgenossen (literally: comrades by oath ), used since the 14th century. The data code for Switzerland , CH, is derived from Latin Confoederatio Helvetica ( Helvetic Confederation ). The toponym Schwyz itself was first attested in 972, as Old High German Suittes , perhaps related to swedan 'to burn' (cf. Old Norse svíða 'to singe, burn'), referring to

12792-762: The national territory. Lake Geneva is the largest lake and is shared with France. The Rhône is both the main source and outflow of Lake Geneva. Lake Constance is the second largest and, like Lake Geneva, an intermediate step by the Rhine at the border with Austria and Germany. While the Rhône flows into the Mediterranean Sea at the French Camargue region and the Rhine flows into the North Sea at Rotterdam , about 1,000 kilometres (620 miles) apart, both springs are only about 22 kilometres (14 miles) apart in

12915-562: The neighbouring economies were devastated, but had to face the reputational damage from its support to the Axis powers, which also led to threats to banking secrecy as the Allied victors sought to expropriate Nazi assets held under Swiss custody. By and large, the Swiss banking sector was able to successfully deflect the threat to its secrecy practices, not least as it supported France and the United Kingdom with significant lending. When British politician George Brown blamed " gnomes of Zurich " for

13038-549: The opening of new accounts by US citizens and by dual US-Swiss citizens, including those deemed lawful permanent Swiss residents. Thus banking secrecy remains in force only for those residing in and solely taxable in Switzerland. Disclosing client information has been considered by Switzerland a criminal offence since the early 1900s. Employees working in Switzerland and at Swiss banks abroad have "long adhered to an unwritten code similar to that observed by doctors or priests ". Since 1934 Swiss banking secrecy laws have been violated to

13161-582: The patriciate was only temporary. After a period of unrest with repeated violent clashes, such as the Züriputsch of 1839, civil war (the Sonderbundskrieg ) broke out in 1847 when some Catholic cantons tried to set up a separate alliance (the Sonderbund ). The war lasted less than a month, causing fewer than 100 casualties, most of which were through friendly fire . The Sonderbundskrieg had

13284-483: The practice is legally mandated and protected (e.g. off-shore financial centers ). Almost all banking secrecy standards prohibit the disclosure of client information to third parties without consent or an accepted criminal complaint . Additional privacy is provided to select clients via numbered bank accounts or underground bank vaults. Recent research has indicated that the use of offshore financial centers has been of concern because criminals get involved with them. It

13407-623: The practice was started by Italian merchants during the 1600s near Northern Italy (a region that would become the Italian-speaking region of Switzerland). Geneva bankers established secrecy socially and through civil law in the French-speaking region during the 1700s. Swiss banking secrecy was first codified with the Banking Act of 1934 , thus making it a crime to disclose client information to third parties without

13530-414: The right to vote . Some Swiss cantons approved this in 1959, while at the federal level, it was achieved in 1971 and, after resistance, in the last canton Appenzell Innerrhoden (one of only two remaining Landsgemeinde , along with Glarus ) in 1990. After obtaining suffrage at the federal level, women quickly rose in political significance. The first woman on the seven-member Federal Council executive

13653-778: The sixth century, following Clovis I 's victory over the Alemanni at Tolbiac in 504 AD, and later Frankish domination of the Burgundians. Throughout the rest of the sixth, seventh and eighth centuries, Swiss regions continued under Frankish hegemony ( Merovingian and Carolingian dynasties) but after its extension under Charlemagne , the Frankish Empire was divided by the Treaty of Verdun in 843. The territories of present-day Switzerland became divided into Middle Francia and East Francia until they were reunified under

13776-686: The sole purpose of tax auditing . This agreement includes the Common Reporting Standard (CRS) which obliges Swiss banks to automatically send foreign tax authorities the client's name, address, domicile , tax number, date of birth, account number, account balance at years end, and the gross investment income . The CRS does not, however, override the Swiss Banking Law of 1934, so the client's expenses (withdrawals) and investments are not disclosed. Thus tax authorities cannot "go fishing" for tax evaders, they must directly link

13899-734: The southeast the long Engadin Valley, encompassing St. Moritz , is also well known; the highest peak in the neighbouring Bernina Alps is Piz Bernina (4,049 m or 13,284 ft). The Swiss Plateau has greater open and hilly landscapes, partly forested, partly open pastures, usually with grazing herds or vegetable and fruit fields, but it is still hilly. Large lakes and the biggest Swiss cities are found there. Switzerland contains two small enclaves : Büsingen belongs to Germany, while Campione d'Italia belongs to Italy. Switzerland has no exclaves. Bank secrecy Otherwise known as bank–client confidentiality or banker–client privilege ,

14022-677: The study conducted by the Boston Consulting Group . Most of the wealth from overseas in Switzerland originates in Germany , France and Saudi Arabia (2018). According to the Swiss Bankers Association in 2022, the amount held by Russian clients in Swiss banks is between CHF 150 and CHF200 billion ($ 160 and $ 214 billion). The Swiss Financial Market Supervisory Authority (FINMA) is a public law institution that supervises most banking-related activities as well as securities markets and investment funds . Regulatory authority

14145-512: The tracking down and freezing of assets, Swiss NGO Public Eye has called for a national task force, a register of the beneficial owners of front companies and a reporting obligation for lawyers. The Tax Justice Network (and FATF ) made similar recommendations in 2018, including breaking up the Big Four accounting firms . As of 2022, the Swiss government is following up on some of those recommendations. In addition, Transparency International

14268-505: The use of shell companies , trust funds , and proxy directors signing the paperwork without owning the assets. Similarly, the use of a " straw man " or a family member is a way also to hide the true beneficial ownership in some cases. Loopholes exist also with people with multiple nationalities who only declare one citizenship to the authorities for the purpose of tax reporting . Another loophole consists (for US citizens) in setting up shell companies abroad and registering them with

14391-642: The wider world by Axis-controlled territory. Over the course of the war, Switzerland interned over 300,000 refugees aided by the International Red Cross , based in Geneva. Strict immigration and asylum policies and the financial relationships with Nazi Germany raised controversy, only at the end of the 20th century. During the war, the Swiss Air Force engaged aircraft of both sides, shooting down 11 intruding Luftwaffe planes in May and June 1940, then forcing down other intruders after

14514-496: Was Elisabeth Kopp , who served from 1984 to 1989, and the first female president was Ruth Dreifuss in 1999. In 1979 areas from the canton of Bern attained independence from the Bernese, forming the new canton of Jura . On 18 April 1999, the Swiss population and the cantons voted in favour of a completely revised federal constitution . In 2002 Switzerland became a full member of the United Nations, leaving Vatican City as

14637-624: Was a partial [dent]". In March 2015, the Swiss government entered into bilateral "Rubik Agreements" with Germany, Austria, and the United Kingdom allowing foreign holders of Swiss bank accounts to retain their anonymity in exchange for paying predetermined back taxes . Switzerland adopted the International Convention on the Automatic Exchange of Banking Information ( AEOI ) in 2017, agreeing to automatically release limited financial information to certain countries for

14760-575: Was complicated and controversial; over the course of the war, it admitted as many as 300,000 refugees while refusing tens of thousands more, including Jews persecuted by the Nazis. After the war, the Swiss government exported credits through the charitable fund known as the Schweizerspende and donated to the Marshall Plan to help Europe's recovery, efforts that ultimately benefited

14883-513: Was integrated into the Roman province of Raetia . Sometime around the start of the Common Era , the Romans maintained a large camp called Vindonissa , now a ruin at the confluence of the Aare and Reuss rivers, near the town of Windisch . The first and second century AD was an age of prosperity on the Swiss Plateau. Towns such as Aventicum , Iulia Equestris and Augusta Raurica reached

15006-507: Was part of the territory of the Kings of the Burgundians , who introduced the French language to the area. The Alemanni settled the Swiss Plateau in the fifth century and the valleys of the Alps in the eighth century, forming Alemannia . Modern-day Switzerland was then divided between the kingdoms of Alemannia and Burgundy . The entire region became part of the expanding Frankish Empire in

15129-628: Was the second-largest Swiss bank. Based in Zürich and founded in 1856, Credit Suisse offers private banking, investment banking and asset management services. It acquired the First Boston Corporation in 1988 and merged with the Winterthur insurance company in 1997; the latter was sold to AXA in 2006. The asset management services were sold to Aberdeen Asset Management during the 2008 financial crisis . Credit Suisse has been at

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