Linkages between Swiss monetary policy and Swiss financial centre

Linkages are obvious. But we usually do not see a speech where one talks about financial centres.

Thomas J. Jordan chief of Swiss National Bank gives a speech on the topic. Most don’t know but Swiss have had three financial centres – Geneva, Basel and Zurich. Eventually, Geneva emerged as the preferred one.

It is a great pleasure for me to be here with you tonight in Geneva, a key pillar of the Swiss financial sector. I also feel very honoured to be addressing you at the very first meeting of the ‘Rencontres économiques de Genève’. Indeed, the financial centre of Geneva is also important from an international point of view. Its roots as a financial centre go back several hundred years. In the early 18th century, the minute Republic of Geneva was one of six major international financial centres, together with London, Paris, Amsterdam, Frankfurt and Brussels. It owed its ascent to its cosmopolitanism. Several factors bear witness to this, including the city’s political neutrality and the fact that it welcomed protestant Huguenots who had been persecuted in France. In the 18th century, close personal relationships were established with the leading Parisian banks and the French court. In this way, Geneva bankers were eventually among the main financiers of France. Jacques Necker, who had been born in Geneva, was Minister of Finance under Louis XVI. After the French Revolution, Geneva began to evolve into an important wealth management centre.1 In 1857, the first Swiss stock market was founded in Geneva, before those in Zurich and Basel. The Geneva stock market soon ranked fifth among European stock markets. Geneva remains one of the major world financial centres today, particularly when it comes to private wealth management.2 The financial sector in Geneva is an engine for the regional economy. In 2014, around 120 banks were based in Geneva.

The financial sector creates a significant part of cantonal value added and is a major employer.3 A strong financial sector, such as that in Geneva, makes a substantial contribution to economic growth. It is therefore a crucial foundation, both for the regional economy and for the Swiss economy as a whole. A robust financial sector is also very important for the Swiss National Bank (SNB). The SNB interacts closely with the financial sector, and in particular with the banking sector. I will talk about this later.

Wish the talk was more on financial centre specfics but it gets to the boring monetary policy and how SNB has done a great job historically. Well, historically yes, not sure about recent times. Perhaps a victim of its own success..

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