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The third largest banking group in Switzerland wants to represent its interests only in the future. The tensions in the banking lobby were great, but the break occurred suddenly.
With the Raiffeisen Group, the bankers association loses its third largest member.
It is a historic step: the Raiffeisen banks leave the Swiss Bankers Association (SBA) after more than one hundred years of membership. The departure will take place on March 31, 2021, according to a statement from St. Gallen on Tuesday. In the future, they will express their own opinion on legislative and supervisory matters.
The Bankers Association was once the most powerful industrial association in the country. He played a key role in the financial crisis of 2008 and the sluggish wealth negotiations of the 1990s. Raiffeisen’s departure puts you in a tough spot.
One has separated
The interests of banking groups have diverged markedly for some time. Many national banks are dissatisfied with the political orientation of the bankers’ association and have recently felt left out. For example, access to the European market, which is only available on the basis of a framework agreement with the EU, is less important to them than especially to private banks serving their foreign clients from Switzerland. For the SBA, however, this market access is an important political goal.
National banks now have their own coordination group with which they can specifically address your concerns. So it is lobbying Bern increasingly independently of the SBA, also through the parliamentary group of national banks. In addition to the Raiffeisen group, this coordinating group includes Migrosbank and the combined cantonal and regional banks.
Last but not least, Raiffeisen’s departure is probably an image upgrade as well – the group is distancing itself from big banks, which have been under close public scrutiny since the financial crisis at the latest and are a target Popular for claims, especially on the left, like manager bonuses, fighting climate change, or funding gun manufacturers.
The connection bracket became brittle
It’s not that the Bankers Association has no successes to show for it: Covid’s efficient loan repayment coordination shows that the various banking groups and the SBA are quite capable of acting efficiently if they come together. Only there seem to be fewer such opportunities.
Domestic and foreign oriented banks have been pursuing different business strategies and therefore often different interests for decades. However, several developments have recently intensified these centrifugal forces and made them more apparent.
One group, the fight for Swiss banking secrecy, disappeared some time ago. Furthermore, the increasing density of regulation forces the bankers association to take a position, even if the interests of its members diverge.
More recently, these difficulties became evident in the implementation of the international Basel III framework, or in the positioning of the principle of proportionality: because all regulation involves high fixed costs, small banks suffer more. That would be the basic idea that they should only have to implement certain rules in a simplified way. This, in turn, is fundamentally unpleasant for large banks, because unequal treatment can be the basis for a distortion of competition. Constantly finding new commitments is possible, but a feat.
“Accomplish more together”
The bankers’ association regrets the departure of Raiffeisen. As an umbrella organization, it will continue to represent seven of the eight banking groups and almost all banks in Switzerland, writes the SBA. Also in the future, the company will be “open to the membership of the Raiffeisen (sic) banks and their employees.” The plural indicates that hope is initially directed towards individual institutes and not towards the St. Gallen headquarters.
The association also objects to criticism that it is siding with the big boys. Significant progress and success has also been made for domestically oriented banks: for example, the small bank regime, which provides regulatory relief for small banks, or increased industry involvement in Finma regulations. The SBA emphasizes the importance of a united banking center and a strong voice. “We are convinced that together we can achieve more for our financial center,” said CEO Jörg Gasser. The main standards are set internationally today, so this strong voice is needed.
Last year, the SBA worked on its governance structure to address the concerns of nationally oriented institutions. Raiffeisen’s group obviously couldn’t convince them.
A difficult task
For the bankers’ association, Raiffeisen’s departure means a great loss, both financially and personally. As the third-largest member, the Raiffeisen Group paid a significant portion of the SBA’s annual budget, which in 2019 was around 21 million Swiss francs. As is customary in business associations, Raiffeisen also participated in the work of the militia with his own personnel, for example in expert preparatory committees. On both points, however, it can be assumed that the other SBA members can bridge the gap if they wish.
The problem for the bankers association is that other national banks may have similar thoughts to the Raiffeisen group; they could join the decision from St. Gallen. The Swiss banking world would be split into two parts, and the venerable bankers’ association founded in Basel in 1912 would no longer live up to its claim to represent the entire industry in public and in relation to politics.
