It has been about ten years since Switzerland ended banking secrecy. Back then you had been in the Federal Council for less than a year. What memories do you have of the decision at that time?
At the time, there was considerable pressure from the rest of the world and people sensed that it was coming. Nevertheless, Switzerland always believed that the decision could be averted. When the pressure proved too great and the decision was made, Switzerland felt somewhat caught off guard. It was not sufficiently prepared for the decision or its consequences. The belief that it did not concern us prevailed in Switzerland for too long.
At that time you were not yet in your current department. From today’s perspective, do you think it was the right decision?
Right or wrong, nothing could be done about it. However, Switzerland ended up very much on the defensive and therefore achieved less than it might have done with a more offensive approach. We constantly found ourselves in a defensive position, which meant that we could do little off our own bat and had to adopt a lot of things one-to-one.
Swiss banks are coming under more and more pressure; digitalisation and a generation that is increasingly focused on sustainability are a challenge for established domestic institutions. In your view, what are the most important tasks for the Federal Department of Finance (FDF) in supporting the banking sector? Where do you see scope for improvement?
It is important to approve new technologies and draw up guidelines for their use, but without putting up barriers. This is not just about banking, it concerns the entire financial sector and all financial market players. The Federal Department of Finance must keep an eye on and support not only “traditional” banks, but all financial market players. Switzerland is one of the world’s leaders when it comes to new technologies, and it is important to maintain and further expand this lead and thus ensure good conditions.
Digitalisation is one of the biggest global trends in society as a whole and is permanently changing the economy and many business models. The OECD is currently developing proposals on how corporate taxation should be revised in the longer term. On the one hand, tax revenues should move away from headquarter jurisdictions towards market jurisdictions and, on the other hand, a minimum tax rule is to be introduced. What impact would this have on Switzerland as a business location?
For the state, this change would tend to lead to lower tax revenues. However, these changes would have no direct impact on the attractiveness of Switzerland as a business location. We offer an attractive tax location and many other advantages, such as a stable political system, great know-how in the financial centre and a well-diversified economy. Switzerland will remain attractive as a location to base a company’s headquarters even under the new rules that are currently being drafted.
Digitalisation is also a topic at the FDF. What measures and objectives is the FDF pursuing in this field? What is the situation like for you personally? How much paper is on your desk?
A lot of things in the Federal Administration are still paper-based. When there is paper on my desk, it is only for a few hours at most. Various major digitalisation projects are underway at the FDF, both in the Federal Tax Administration and in the Federal Customs Administration with DaziT, as well as the renewal of the Federal Administration’s support systems. Together with the cantons, the FDF is the driving force behind digitalisation in the Federal Administration. In order to establish digital public services in Switzerland, the Confederation, cantons and communes have been working together since 2008 and have defined a joint strategy. The aim is to digitalise processes between the three levels of government and to provide digital access to services for third parties. For example, companies and private individuals can use ePortal to access government services faster and more directly.
In the course of the discussions on the climate crisis, the financial centre has also become the focus of attention as a supporter of climate-damaging industries. In your opinion, what measures would be appropriate to promote climate-friendly investments?
The strategic further development of financial market policy, which the Federal Council approved on 4 December 2020, places the sustainability of investments in the foreground. Switzerland wants to play a leading role here. Demand for sustainable investment projects is currently greater than supply. It is therefore important to certify particularly sustainable projects accordingly. It is not about ideological sustainability, but about promoting a green, innovative economy. Swiss quality and credibility also give us an advantage in sustainable investments. The Federal Council intends to go further in terms of quality than its European counterparts.
The Federal Council is striving to establish Switzerland, and in particular the so-called Crypto Valley in Zug, as a leading location for companies in the field of blockchain technology. What opportunities and risks does this present for Switzerland in your view? To what extent can Switzerland contribute to the positive development of this market?
This is not just about Crypto Valley in Zug, but about Switzerland as a whole. This includes close cooperation between the universities, especially the ETHs, industry and the start-up scene. Cryptocurrencies may make it more tempting to hide criminal activities somewhere or to engage in money laundering and this can pose reputational risks. However, good regulation reduces the risks and, in addition, clear, transparent legislation creates security for players in this area and increases the opportunities for the sector. Switzerland is well positioned in this respect. With innovative technologies, opportunities are also to be found in leaving room for development and ensuring that progress is not stifled.
As mentioned before, you have been a member of the Federal Council for over ten years, you could have long taken up retirement and be enjoying life. What motivates you to continue doing this work? Even with your experience, what are your greatest challenges?
I have no interest in retiring. If you enjoy your work, it is almost more like a hobby and I simply have an exciting hobby. The biggest challenges come from working together as a team, be it in the department or in the relevant bodies. Problems can be solved but this requires an interpersonal climate that makes good and quick solutions possible.
