Review of the 2023 financial landscape by Fabian Käslin
Fabian Käslin, CEO of Banque Havilland (Liechtenstein) AG
The champagne is chilled, the fireworks are positioned and the Fondue-Chinoise-Caquelon is polished: We’re ready for New Year’s Eve.
Ready for a new year.
A good time to look back on the old year. What has happened in the financial world, especially in Switzerland? Here are three observations.
1 – Credit Suisse is no more
On July 5, 1856, the Swiss entrepreneur and politician Alfred Escher founded Schweizerische Kreditanstalt (later Credit Suisse, CS) in Zurich – last March it was put to rest in Bern, or rather in the hands of UBS.
It was not a sudden death, and yet it came as something of a surprise. This event will be on our minds until the end of the year and probably for a long time to come.
Christmas goose slaughtered
Anyone reading the financial press in 2023 could hardly keep up with how many CS talents moved to a new employer. The Christmas goose seems to have been cooked – colleagues from the private banks in Geneva and the big banks in Zurich are filling their bellies. A lot of fireworks are expected. What really remains of this will be a topic for one of the next annual reviews.
In principle, less competition is rarely good – neither for customers, employees or the financial center – and the self-inflicted decline of CS is certainly not beneficial for Switzerland’s image in the global world; 2023 was therefore a bad year for the Swiss financial center. All the more reason to wish those responsible at UBS all the best – there is a lot at stake for all of us.
2. The comebacks of the year
USA beats Puerto Rico: After three years at the top of the “most streamed artists” list, Bad Bunny had to give way: Taylor Swift took the lead – she sang almost 27 billion (!) times directly into our ears.
The duo of “interest rates and inflation” made a similarly strong appearance in 2023: purchases became more expensive, demand for luxury goods fell slightly, car dealers offered discounts again and banks recorded strong interest income – at least the majority of them.
Nevertheless, the conclusion is somewhat unclear: Switzerland is once again able to shield itself somewhat better thanks to its strong currency: In terms of inflation, we are doing much better than our colleagues in the EU – but measuring yourself against the worst has never been good in life.
Together we would be stronger
The Swiss financial center fared less well in 2023. Negative headlines continued after the CS crisis and will probably remain with us beyond the end of the year. In the short term, I hope that my former colleagues at Julius Baer will get to grips with the issue quickly and sustainably. In the long term, a little more joint strategy and image cultivation could certainly do the Swiss financial center some good.
It is commendable how Sergio Ermotti is trying to do this almost single-handedly at the moment; at events, on LinkedIn, in interviews and via advertising campaigns, he explains to the world how strong the Swiss financial center is and how manageable the size of UBS is globally, and why we as a country are still number one in the world of global wealth management.
Why we leave him alone seems strange to me. A bit more of a common, global strategy would certainly do the financial center good. But that will probably remain a New Year’s resolution – just as realistic as my recently purchased fitness subscription for 2024.
3. Dynamic standstill
Little seems to have changed on the financial markets in 2023: The Swiss Market Index (SMI) is virtually unchanged somewhere near 11,000 points. But appearances are deceptive: UBS shares have gained a good 50 percent, while those of Bank Julius Baer have lost almost 15 percent in value.
Bitcoin once again overshadowed everything else: it rose by a good 140% (in Swiss francs) – the trial surrounding Sam Bankman-Fried had little effect on the cryptocurrency.
Donald Trump is much more experienced than the FTX founder in the courtroom: he also seems to spend more time there than the average elected judge, and yet: he defended his pole position in the Republican candidate carousel throughout 2023 without any problems. A lot seems to have happened – and yet nothing has changed.
The situation is similar for Murat Yakin and our national team: on December 22, 2022, our Swiss men were still ranked 12th in the FIFA rankings – exactly where they are today. Nevertheless, Yakin was heavily criticized throughout the year – much like the 45th president of the USA.
Joe Biden, finds himself in high office – as the current US president – and at an even older age – confronted with major geopolitical challenges. There is little new here either – but in addition to the unresolved Ukraine situation and the ongoing trial of strength between the USA and China, anti-Israel terrorism is now also coming to the fore.
Speaking of politics: Switzerland has once again held elections. The National Council is slightly more bourgeois and the Council of States more left-wing. So we have remained true to ourselves and have not changed anything here either.
It’s the nuances that matter
Nevertheless, many things change, and even some things remain the same – 365 days is a manageable period, after all; there is little room for fundamental changes: But the nuances are important.
And as bankers, we should therefore be aware that international pressure – mostly politically motivated – is unlikely to diminish: Success breeds envy. At the same time, this success is not God-given, but hard-earned.
Here’s to 2024!
However, hard work seems to have been somewhat neglected in the recent past, or at least is less important to bankers than to bankers. In this respect, it is to be hoped that 2024 will be a year in which the Swiss financial sector once again makes a name for itself with strong results and even stronger values.
So that the 2024 annual review really will be worthy of champagne.