The swiss banking system

This article is co-authored by Henri B. Meier, John E. Marthinsen, Pascal A. Gantenbein and Samuel S. Weber.

This article trace the history of the Swiss banking system from the 16th century to the present day. 

In addition to historical milestones such as the Industrial Revolution (19th century), which saw the birth of the current structure of the Swiss banking system.

The authors explain how the Swiss banking system works with the help of detailed tables and graphs.

They also explain the regulatory systems that allow the Swiss banking system to regulate itself. 

The authors also discuss in more detail the new challenges facing the structure of the Swiss banking system. One of the new challenges facing the Swiss financial system is the digitalisation of the international banking system.

By digitalisation, we mean the emergence of cryptocurrencies such as bitcoin and ethereum. It also includes the development of state-owned digital currencies such as the e-yuan (Chinese digital currency). 

As an example, in 2022, Switzerland will be home to around 400 companies in the fintech sector. A third of these companies are dedicated to infrastructures and protocols that allow simultaneous read and write access to a database (distributed ledger technology - DLT).

This infrastructure ensures the reliability of the data and limits the visualization of the same data. This is the same technique that has allowed the emergence of blockchain technology.

But digitalisation isn't just about cryptocurrencies, it's also about cyberdefense. Since the invasion of Ukraine, we have seen an increase in cyber attacks in various forms (botnets, phishing, Ddos...).

These different vectors of computer attacks can bring down the banking system.

We know that Switzerland has two systemic banks (Credit Suisse and UBS).

This article appeared in the book Swiss Finance (full access here, in open edition)