Predictably, a trade group says the industry it serves is doing pretty well. With a bit less than a third of all global private wealth deposited abroad, Switzerland remains a favorite banking haven for ultra-wealth, according to a study by the Swiss Bankers Association (SBA).

The SBA says Swiss banks held about 28% of global offshore private capital at the end of 2005. That came to around $5.9 trillion.

In contrast, Asia's flourishing wealth centers Hong Kong and Singapore held, respectively, only 4% and 3% of global offshore capital.

Conjure with it

The study says that Swiss private banks benefit from "a tradition of high-end services, the availability of skilled staff and a predictable regulatory environment."

In addition, says the study, "Switzerland provides wealth-management banks with [a] pillar of market positioning in an increasingly brand-conscious industry." That's a long way of saying the phrase "Swiss bank" has a nice cachet.

The SBA makes little of the fact that, over the last decade or so, wealthy people around the world have been increasingly apt to keep their money at home instead of stashing it in "safe havens." That's what lies behind the home-market consolidation and offshore expansion of the Swiss private banks.

The SBA did see fit to caution that the future of Swiss private banking is by no means assured. "Wealth managers, particularly smaller players, are exposed to periodic market downturns translating into falling asset-based revenues and sticky overhead costs," according to the study. -FWR

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