How is Switzerland handling the credit crunch?

C

csirl

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I've been wondering about this. The Swiss economy is dominated by the banking sector. You would think that they would be basket case now due to the credit crunch. Is Switzerland in big big big trouble? If not, why?
 
just take one look at the swiss banks results - pathetic
 
The Swiss banking crisis is an externalised issue. The bank bought international debt (mainly in the US).

As less than 30% of swiss people own their own home, there was never the risk of a credit bubble.

So, the banks suffer due to mistakes they made outside of the country but the country itself is in better shape than many of its neighbours.
 
...and lets face it, they have plenty of Gold (they may have to dig up the streets to get at it though ;)).
 
There's no denying the banks are screwed. They just managed to mess up outside of its own borders. Plus, if the recession does hit Switzerland in a big way, the public have enough in savings (and low debt) to ride out the problem. A complete contrast to Italy, Greece, Spain, Ireland, GB and the US.
 
i think switzerland is in trouble, other countries have lost patience with their secretive banking system, obama is putting big pressure on them to release details of american account holders, i think britain france and germany will also start putting pressure on them,
 
joe sod said:
.....i think britain france and germany will also start putting pressure on them,
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The Swiss have managed to repel any political and economic pressure for the last 700+ years. I hardly think they're going to buckle now!
 
Strathspey said:
The Swiss have managed to repel any political and economic pressure for the last 700+ years. I hardly think they're going to buckle now!
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Yep, when you build your economy on financing genocide, terrorism and murder you have to be careful who you let look in the window.

I can’t stand Switzerland; it has to be the most morally reprehensible country in Europe and the most hypocritical in the world.
 
Geneva is also suffering badly on the back of the drop in Hedge Fund assets and the Madoff and Sandford scandals.

Speaking to a couple of Swiss private bankers a few weeks ago they said the place was in a state of shock - there was little appetite for new business and no appetite for risk!
 
There was an interesting piece on Switzerland (and Uruguay) in an old McWilliams article from 2006:

"Economic history is replete with examples of this. A country we are rarely compared to is Uruguay. However, if there is one place that Ireland in the early 21st century resembles it is Uruguay of the early 20th century. It maybe hard to believe now, but Uruguay was the world’s fastest growing country for almost twenty years. It had the amongst the world’s most comprehensive social welfare system, brilliant infrastructure and like Ireland today, a rapidly rising population driven by immigration. So advanced was this small Latin American country, that it was termed the “Switzerland of the Americas”. Uruguay was in truth nothing of the sort. Like Ireland today, it was a supply region. In its case, it was a highly efficient part of the global trade in agriculture. Uruguay was one of the world’s most competitive suppliers of meat, wool and leather. Its farms were amongst the most productive in the world and with the huge revenues it gained from this pre-eminence, the government invested in a state of the art welfare system, great schools and a European-style transport infrastructure. Montevideo’s boulevards were home to the finest fashions of New York and Paris. The virtuous cycle seemed to have taken hold. Because it was so brilliant at agriculture, Uruguay did not see fit to promote other industries or innovations. Montevideo was content to process agricultural products, add value and export them.

In the 1930s things began to change. Agricultural prices fell worldwide. Uruguay suffered its first recession. Then after the Second World War European countries - having flirted with famine in 1945-46 - began to crank up agricultural production. Australia and New Zealand emerged as significant players in the market and Uruguay’s period in the sun came to a crashing end. Since then, Uruguay’s story has been one economic disaster after another.

Arguably, had the government and the people realized that they were experiencing a one-off “golden age” they might indeed have innovated in other industries to become the true Switzerland of the Americas. But they did not. Money ran through Uruguay like a dose of salts and sixty years after its heyday it has not yet responded to the challenge thrown down in the late 1940s. In the dry language of economics, Uruguay suffered from what is termed “a terms of trade shift”. The international value of what they exported fell at the same time as the prices of their imports rose. And, they had all their eggs in one basket.

Switzerland, on the other hand, has thrived. Its wealth was based not on being a link in the global supply change but rather on years and years of strong domestic innovation, based in its small cities. Its industrial base has been diversified for years and it can ride out vagaries in the world economy."

The full article is here:
[broken link removed]
 
I remember reading that Shnaek.
Basically Switzerland has a high-tech, knowledge based manufacturing economy as well as a massive financial services sector. Ireland is a tax haven, a logistics hub and an outsource manufacturing base. We’re the little piggy with the straw house, they’re the one with the brick house.
 
Does anyone do much business with Switzerland? We do a little but it's not easy. They are fiercely protective of their economy and will only import when absolutely necessary it seems. Bloody tight buggers too - no wonder they have loads of money. :)
 
Caveat said:
Does anyone do much business with Switzerland? We do a little but it's not easy. They are fiercely protective of their economy and will only import when absolutely necessary it seems. Bloody tight buggers too - no wonder they have loads of money. :)
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They "imported" plenty of gold in the 30's and 40's ;)
 
From an email I received earlier titled: 21 Economic Models
Explained:

A SWISS CORPORATION
You have 5000 cows. None of them
belong to you.
You charge the owners for storing them.

NAZISM
You have 2 cows.
The State takes
both and shoots you.

FASCISM
You have 2 cows.
The State takes both
and sells you some milk.
 
shnaek said:
Then after the Second World War European countries - having flirted with famine in 1945-46 - began to crank up agricultural production. Australia and New Zealand emerged as significant players in the market and Uruguay’s period in the sun came to a crashing end. Since then, Uruguay’s story has been one economic disaster after another.
[broken link removed]
Click to expand...


Could happen to Ireland if we are not careful. Eastern Europe could be our australia....
Difference is we used have the cheapest and best work force in Europe. We may not have the cheapest anymore but we are certainly up there in the quality stakes (well in the private sector anyway;)). I think we have to find a way to minimise wages to make us attractive again...income tax anyone?
 
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