On October 16, Swiss book author and journalist Gian Trepp called on Swiss leaders to stick to the Swiss anti-oligarchical historical tradition as basis for a Glass-Steagall-like banking reform. Trepp responded to an article in the Swiss financial daily Neue Zürcher Zeitung by Cantonal Bank Federation head Urs Mueller, who pushed for “a dual approach in banking regulations.” This is OK, Trepp wrote in his blog, but it means that banks must be reformed “from the standpoint of a bank separation system. Uncontrolled risks of UBS and Credit Suisse must be separated geographically and structurally.”
Instead, Prof. Mueller says: More regulation for large banks which are active internationally, and less for cantonal banks, which are active nationally. This is wrong, Trepp writes, because it would offer cantonal banks the possibility of turning into speculative banks.
The roots of Prof. Mueller’s mistake are in the defective “traditional, liberal Swiss regulation,” Trepp says. The “liberal” revolution of 1848 is only one element of the Swiss national identity. Two other dates are important: 1291 and 1918.
For non-Swiss, a short compendium:
The Swiss nation was born in 1291, when three Cantons joined together to found a federal state, gaining back the freedom that had originally been given them by Emperor Friedrich II Hohenstaufen and eventually stolen by the Hapsburg King. The Federal Charter, or Bundesbrief, of 1291, which contains the basis of a constitutional state, is today considered along with the later Rütli Oath, and with the legend of Wilhelm Tell as celebrated by Friedrich Schiller, to represent the founding ideas of the Swiss nation. The coming together of three cantons which had been in a cruel war with each other is mini-Westphalian process long before the Treaty of Westphalia. The warring parties recognized that a solution could exist only if the former enemy became the partner.
In 1918, in the end-phase of World War I and in the aftermath of the deadly influenza epidemic that decimated the population, Switzerland was swept by a general strike. The strike was eventually suppressed, but it forced the government to introduce labor and civil rights concessions, such as universal voting rights, the 48-hour work week, labor union rights, etc.
“The 1291-1848-1918 Chord [Dreiklang] lays the basis to define the Term ‘National Economic Interest’ in the 21st Century, and with that, also the basis for the urgent reform of the Swiss banking system,” Trepp wrote.