Reply #30: Following the Money to Switzerland

[UpInArms]

No holes in Swiss strategy
Banks add assets, court high-net-worth Americans

http://www.marketwatch.com/news/story.asp?guid=%7BDC23B226%2D6067%2D4DF5%2DBD5F%2D5BFDFC76874E%7D&siteid=mktw

SANTA MONICA, Calif. (MarketWatch) -- The world's richest people continue to put their money in Switzerland -- at record levels.

Union Bank of Switzerland and Credit Suisse First Boston are taking assets of extremely high-net-worth individuals away from their U.S. rivals, such as Merrill Lynch, by focusing their efforts on Asia and offering more alternative investments.

Indeed, a recent issue of Private Banker International says "new earnings data suggest the two Swiss banks are now drawing well away from their big rivals in reasserting their global ascendancy in wealth accumulation."

Analysts say UBS has outpaced Merrill Lynch threefold in asset gathering.

Last quarter, UBS reported 20% quarterly growth in its wealth-management division, to $24 billion. Credit Suisse reported a 10% rise in assets to about $11 billion over second-quarter net new money.

And the banks are snapping up these assets in the face of an international crackdown on bank secrecy rules and offshore banking schemes. Swiss banks are famous for their stringent private-banking codes. (In 2003, international pressure forced Switzerland to lower the restrictions it had on allowing "source of funds" and accountholder information to be withheld.) Heretofore, that privacy also came with a price: low to negative interest rates as compensation for protection.

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