Switzerland, even though its economy relies heavily on banking, doesn’t seem to be affected all that much by the current crisis.
Does anyone have insights on why?
Switzerland is a particular case. Yes, banking is an important sector of their economy but, truth to be told, the amount of foreign-owned accounts is slowly but steadily on the decline due to increasing taxation and decreasing privacy. Also capitals in Swiss banks do not usually fuel their economy but simply stay there or get used in “off-shore” operations.
The Swiss economy has low taxes by European standards and very favorable taxation brackets for high incomes. Why do you think Michael Schumacher and Ingvar Kamprand live there? Also the Swiss Central Bank was the last central bank to go off a partial gold standard in the '90s and this left a legacy of relative monetary sanity. And finally do not forget how industrious and innovative the Swiss are.
Having said that the country has been uneasy of late. Ever since the '70s there have attempts to turn the country from a Confederation into a Federation and there’s an ongoing power struggle between the “Mountain” (Uri, Graubunden, Valois etc) and the “City” Cantons (Zurich, Geneva, Bern etc). The former still favor a very decentralized form of government while the latter are for a much more centralized government. And let’s not forget the EU pressing to have the Confederation join: the Swiss have already made perfectly clear that they would love to join… if the EU was a simple free-trade zone and not a gigantic Soviet-style bureaucracy. Bruxelles has already a fair number of national politicians wrapped around its evil finger but there’s still a healthy popular resistance movement. We’ll see if the Swiss will resist long enough to see the EU fall to pieces like it deserves.
-they are veterans in banking. That all they got.
-They can’t afford to loose their credibility.
-Banking is a huge business, it all depends on what business you are in. And they seem like they did not get that involved in the housing boom.