Emerging-Market Clients Using Swiss Accounts

Switzerland has witnessed an increase in the number wealthy emerging-market clients banking with Switzerland’s stable bank accounts. According to Boston Consulting Group, a record 52% the total 1.96 trillion francs ($2.3 trillion) held in Swiss bank accounts were deposited last year by clients from developing economies. Some predict that this number may increase to 63% by 2015 from the 37% in 2007.

Last year Switzerland’s reputation for protecting the secrets of America’s wealthiest class was tarnished after UBS AG accounts were handed over to the IRS. Boston Consulting Group predicts that North American assets in Swiss accounts will decrease to less than 30 billion francs (over $35 billion) in 2015. In 2007, North American assets totaled around 150 billion francs (over $165 billion), and last year North American assets totaled 60 billion francs (over $70 billion).

European clients have also begun withdrawing funds from Swiss accounts. Regardless, Swiss assets will likely grow at an annual rate of 2.5% as assets from Africa, Latin America, and the Middle East begin to outweigh the European withdraws. As the world becomes more unstable, more and more clients from emerging-markets will likely look to Swiss accounts for the stability and safe-haven attributes they provide.

SeeDylan Griffiths and Klaus Wille, Swiss tax haven lures rich from emerging markets, Jun. 19, 2011.

Special thanks to Joel Dobris(Professor of Law, UC Davis School of Law) for bringing this article to my attention.