Pfrunder's original winning 2005 entry for the new CHF50 note; the SNB says the final version will differ from this and will be unveiled shortly before production

Swiss bank note, early design (final will differ)

ZURICH/ BERN – New Swiss bank notes, tentatively scheduled to make their appearance towards the end of 2012, are being delayed for a year.

The Swiss National Bank says that “unexpected technical problems were encountered in an early production stage” and that it will announce the issue date “as soon as the first banknote denomination is ready for distribution.”

The delay does not pose significant problems, with the current banknotes considered to offer a high standard of security and they can be produced in sufficient quantities, so “the supply of high-quality banknotes to the economy is guaranteed at all times.”

The central bank has not yet unveiled the final designs of the new notes. It held a competition in 2005 for the design and published the 12 finalists’ submissions.

It announced in January 2007 that the winner was Swiss graphic artist Manuela Pfrunder. The bank said at the time that “In the SNB’s competition for the artistic design of a new banknote series, back in November 2005, Manuela Pfrunder was placed second.

When the designs of the three award winners were developed further, Manuela Pfrunder’s work proved to be particularly suitable for a new banknote series. Nevertheless, her designs will have to be thoroughly reworked – both artistically and technically – before they reach production stage.”

The project has been delayed previously. Philipp Hildebrand, then vice-chairman of the bank, announced in late 2008 that “Manuela Pfrunder, the graphic artist, has further developed her drafts and completed the design for the CHF 50 note, taking the technical aspects of banknote production into account. At its meeting of 29 August 2008, the SNB Bank Council approved the design of the new CHF 50 banknote and gave the go-ahead for the further work that is to be done.”

Hildebrand noted that “A particular challenge is posed by the security features that will be used in the new banknote series for the first time. Based on the progress of work to date, the SNB is confident that the first banknote in the new series will be ready for production within the planned time period. The CHF 50 banknote will mark the beginning of the new series of banknotes and is scheduled to be issued in autumn 2010. The appearance of the new banknote and the security details for the entire series will be presented shortly before the scheduled issue date.”

BASEL, SWITZERLAND – Airline Swiss will begin using City Airport in London rather than Heathrow for its Basel flights starting 21 May.

The airline says “the modifications to Swiss’s Basel services have been prompted by the planned sale of sister Lufthansa Group carrier bmi to the International Airlines Group.”

Brady Dougan, Credit Suisse CEO

ZURICH, SWITZERLAND – Credit Suisse Thursday 9 February reported a net loss of CHF637 million for the fourth quarter of 2011, significantly worse than many analysts’ expectations, according to Bloomberg. Full-year figures remained in the black, with net income of CHF1.95 billion, but the profit was down by 62 percent, compared to a net profit of CHF5.2b in 2010.

Chief executive Brady Dougan summarized the result for Q4 as “disappointing”, saying “It reflects both the adverse market conditions during the period and the impact of the measures we have taken to swiftly adapt our business to the evolving market and regulatory requirements.”

It is the bank’s first quarterly loss since 2008 and in the statement issued Thursday the bank attributes it to “realignment costs of CHF414 million from cost-efficiency measures, and CHF567 million from businesses we are exiting and the reduction of risk-weighted assets in our Investment Banking fixed income business.”

The  bank’s private banking business was hurt by “significantly lower levels of client activity and higher expenses for legal matters and credit provisions”.

Private banking new money continued to flow in, with net new assets of CHF40.9 billion for the year, but the last quarter was CHF7.6b, mainly from emerging markets, indicating a slowdown.

State of talks with the US government

Talks with Swiss and US government officials are ongoing, Credit Suisse  notes, over allegations that the bank acted illegally with wealthy US residents who were trying to hide their money from American tax authorities. “Credit Suisse is strongly supportive of a resolution acceptable to both the US and Switzerland. Credit Suisse continues to cooperate with the authorities both in the US and Switzerland to resolve this matter in a responsible manner that complies with its legal obligations.”

Swiss and US officials have indicated this week that they are anxious to resolve the situation, which one top official not directly involved in the talks described off the record as a top area of “tension” between the two countries.

CEO says costs incurred to prepare for new world where banks face new regulatory environment

Dougan says costs incurred to re-position the bank will pay off as it cuts losses from less profitable business areas.

“In mid-2011, we decided to aggressively reduce risks and costs. This decision was rooted in our belief that the market and regulatory environment is undergoing fundamental change, and that by embracing these developments and proactively adjusting our business model, we can position Credit Suisse to succeed in the new environment. The regulatory developments and the subdued market environment in the second half of 2011 have confirmed our views. The accelerated implementation of the risk reduction plan and our measures to exit businesses that are no longer expected to deliver attractive returns in the changed regulatory environment, as well as higher charges incurred due to the rapid execution of the cost reduction programs, led to negative impact of CHF 981 million in the fourth quarter of 2011.”

Swiss warming up for the March Geneva car show as new models announced

Geneva Motor Show 2011 by Mr Kio (on flickr at http://www.flickr.com/photos/igievil/)

GENEVA, SWITZERLAND – A record 420,900 new vehicles were put on Swiss roads in 2011, greatly overtaking the previous record set in 1989.

The number of registered vehicles rose by 2.2 percent compared to 2010, rising to 5.5 million.

The annual figures were published by the Federal Statistical Office in Neuchatel Tuesday 8 February.

Car sales weathering the gloomy economy is good news for the 2012 Geneva Motor Show that opens at Palexpo 8-18 March, with 260 exhibitors.

Among those already promoting the new models they will be showing:

• Italian car maker Fiat is unveiling its five-door version of Fiat 500, the 500L, which will replace the company’s Idea model, a mini MPV. The “new model is based on an evolved version of the Fiat Mini platform”, says the company
• Nissan will “unveil the new Invitation concept car,” reports Automotive Business Review. “The new concept car will be powered by a 1.0-litre engine that offers an ultra-low CO2 emission target of under 100g/km” but the Irish Times is more excited at the prospect of Nissan’s “Emerg-e electric range-extender sports car concept”, not to mention some promising surprises from Jaguar and Lamborghini
• NPR wrote recently that European carmakers keep getting better at diesel cars, which American manufacturers overlooked, but US carmakers are now rethinking diesel, but it’s anybody’s guess right now if they’ll be talking about it in Geneva.

BERN, SWITZERLAND – Swiss unemployment rose from 3.3 to 3.4 percent in January 2012, but there were still 9.7 percent fewer people out of work than in January 2011, figures published Wednesday 8 February show.

Young people accounted for a large part of the increase, with a one-month increase of 3 percent for the 15- to 24-year-old group, but compared to a year earlier, the jobless rate for this age group is down by more than 13 percent.

Thomas Jordan, acting chairman of the Swiss National Bank

ZURICH, SWITZERLAND – The Swiss central bank does not see any risk of inflation for Switzerland in coming months, nor any need to reduce the level of liquidity. However, distortions in the mortgage and real estate market could increase and the Swiss government will soon look at the possible need to intervene.

Thomas Jordan, vice chairman and, since Philipp Hildebrand’s resignation 9 January, interim chairman of the Swiss National Bank (SNB), was addressing the Swiss American Chamber of Commerce Tuesday 6 February in his first major policy statement since taking the reins a month ago. Jordan says the central bank is adhering to its policy of keeping a firm cap on the Swiss franc, a policy that “corrected the overvaluation of the Swiss franc to some extent”.

“Thanks to this decision, investment planning for export-oriented companies has been facilitated, and the risk of both deflation and severe structural damage to the Swiss economy has been reduced. Without this policy measure, the extreme overvaluation of the Swiss franc and its volatility would probably have persisted.”

The SNB set a minimum exchange rate of CHF1.20 per euro in early September of 2011.

A whiff of optimism, but “subdued” outlook might be best we can expect

He offered a crumb of optimism for Switzerland’s financial outlook, saying that “if the European authorities were to credibly commit to a sustainable solution soon, existing uncertainties would be reduced substantially. In such a scenario, demand for perceived safe financial assets would fall in general, and for the Swiss franc in particular”

But he emphasized that we are still living in a world with “substantial downside risks” and the picture could prove worse than today’s “subdued” economic outlook.

“Economic growth will continue to be driven by emerging markets. However, we expect growth rates in China and India – the most important countries in emerging Asia in economic terms – to remain below potential in the near term, due to prior monetary policy tightening, high inflation, and sluggish external demand. Looking at the US, recent data suggest that the situation has improved slightly. However, this should not hide the fact that economic growth in the US is likely to remain sluggish.”

He cites continuing high unemployment in the US and “the fiscal environment remains contractionary. For the euro area – Switzerland’s most important trading partner by far – the economic outlook has deteriorated since last autumn. Uncertainty about an escalation of the sovereign debt crisis is undiminished. As a result, the euro area is likely to face a mild recession in early 2012.”

Liquidity, interest rates and mortgages under debate

Jordan says the SNB’s policy has raised two questions.

“it is argued that the significant increase in liquidity since August 2011 may trigger inflation risks in the longer term. Given the current economic situation, however, expanding the supply of liquidity was a necessary monetary policy response. There is currently absolutely no risk of inflation in Switzerland. First, headline inflation turned negative in October 2011 and continued to decline through the end of the year. It is assumed to fall even further in early 2012. Second, neither our inflation forecasts nor the medium-term inflation expectations from our surveys of households and companies show any signs of inflation risks. Consequently, there is no necessity whatsoever for the SNB to reduce the level of liquidity for the time being.”

The other is the impact of long-term very low interest rates on the housing market.

“On the other hand, a long period of very low interest rates may lead to imbalances in the domestic credit and real estate markets, which may pose serious risks for financial stability. We are well aware of these risks and are analyzing them very carefully. However, due to the exceptional monetary policy situation, interest rates cannot readily be increased to address such threats. In other words, at the current juncture, monetary policy cannot react to these imbalances with conventional monetary policy instruments. Therefore, the Swiss Government is due to decide soon upon the introduction of so-called macroprudential instruments that can be used – if necessary – to mitigate potential credit and housing market distortions.”

GENEVA, SWITZERLAND – The Swatch Group continued in 2011 to have “record numbers at all levels” as it posted its 2012 financial figures Tuesday 7 February. Gross sales were CHF7.14 million,  up nearly 22 percent over 2010′s record sales, at constant exchange rates. “The continued weakness in the euro and the dollar during the year had a major negative impact on sales of about CHF 700 million,” the watchmaking-centred group announced in a statement.

Investors will be happy with its operating profit of CHF1.61 million, up 12.4 percent over the previous year, net income up 181 percent to CHF1.28m and proposed dividends 15 percent higher. More than 2 800 new jobs were created in 2011.

The group says the outlook for 2012 is promising despite the “higher benchmark” challenges and it will continue to invest in production in Switzerland “despite the high Swiss franc”.

ZURICH, SWITZERLAND – UBS, Switzerland’s largest bank, posted a full-year net profit of CHF4.23 billion, compared to CHF7.5b in 2010. The bank’s revenues were up in some areas and new money under management grew strongly, up CHF42.4 billion for the year, showing a turnaround in consumer confidence.

But profits were hurt by fourth quarter losses in investment banking due to stagnant market conditions, with a significant slowdown in trading stocks and bonds. The bank warned investors that the first quarter of 2012 could prove difficult:

“As in the fourth quarter of 2011, ongoing concerns surrounding eurozone sovereign debt, the European banking system and US federal budget deficit issues, as well as continued uncertainty about the global economic outlook in general, appear likely to have a negative influence on client activity levels in the first quarter of 2012. Such circumstances would make sustained and material improvements in prevailing market conditions unlikely and would have the potential to generate headwinds for revenue growth, net interest margins and net new money. In light of the above, traditional improvements in first quarter activity levels and trading volumes may fail to materialize fully, which would weigh on overall results for the coming quarter, most notably in the Investment Bank.”

Analysts, according to financial media, were looking for Q4 net profits of CHF658 million but UBS reported CHF393m, down from third quarter profits despite the write-off in Q3 of 1.8 billion lost by a rogue trader.

Analysts were also looking at the bank’s capital-building and to see how well UBS is offsetting reduced revenue streams with continued cost-cutting. They were not disappointed here: UBS is currently one of the world’s best capitalized banks, noting in its statement to media Tuesday that it had reduced “Basel III risk-weighted assets by an estimated CHF20 billion and [was] building capital ratios”.

In 2011 it cut the bonus pool by 40 percent as part of cost reductions of CHF2.1 billion. Total costs last year were CHF22.4b. The company trimmed jobs but overall staffing remained at nearly 65,000 employees worldwide.

The year-end results were published with fourth quarter results before markets opened Tuesday 7 February.

Thomas Vellacott, appointed CEO of WWF Switzerland effective May 2012 (photo, ©2012 Buettner / WWF)

BERN, SWITZERLAND – WWF Switzerland will have Thomas Vellacott, 41, as its chief executive officer in mid-May 2012, when Hans-Peter Fricker retires. Vellacott won out over nearly 300 candidates for the job as head of one of Switzerland’s most active and influential environmental organizations.

He joined WWF in 2003 and has been in charge of its Programmes unit, with responsibility for its national and international programmes, which focus on global warming, preserving biodiversity and sound management of resources.

Vellacott is a native of St Gallen, has no political party and he has a mix of corporate and non-profit experience.

He studied Arabic philology and international relations at Durham University in Britain, in Cairo, Egypt and at Cambridge University. After obtaining a master’s degree he worked for the private banking unit of Citibank then as a consultant for McKinsey in Zurich.

BERN, SWITZERLAND – Comco, Switzerland’s competition commission, has opened an investigation into more than 10 international banks and companies and the country’s two largest, UBS and Credit Suisse, for possible “collusion between derivative traders [that] might have influenced the reference rates Libor and Tibor. Furthermore, market conditions regarding derivative products based on these reference rates might have been manipulated, too.”

The investigation follows what Comco calls an application to its leniancy programme, or self-denunciation, without providing details of who provided the information. The investigation could take several months. The banks targeted by the investigation include: Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank Aktiengesellschaft, HSBC Holdings plc, JP Morgan Chase & Co., Mizuho Financial Group Inc., Rabobank Groep N.V., Royal Bank of Scotland Group plc, Société Générale SA and Sumitomo Mitsui Banking Corporation.

Libor, the London interbank lending rate and Tibor, in Japan, are rates set daily based on bank data, which serve as underlying lending rates. The Swiss National Bank defines Libor as:

“The Libor (London Interbank Offered Rate) refers to the interest rate for unsecured money market loans to prime banks. Each bank business day, specific banks report to the British Bankers’ Association (BBA) the interest rate at which they would be able borrow unsecured funds of a reasonable market size on the London interbank market shortly prior to 11 a.m. The relevant top and bottom-quartile interest rates are disregarded when fixing the Libor. An average is calculated on the basis of the remaining interest rates, and the figure obtained in this manner is fixed and published as the Libor for the day in question. Libor rates are fixed in different currencies and with varying maturities.”

The investigation comes three weeks after European Union anti-trust boss Joaquin Almina said the EU is stepping up its efforts to ensure that derivatives markets remain free and competitive. Antoine Colombani, spokesperson for the European Commission is cited by Bloomberg as stating in January that “Last October we carried out unannounced inspections at the premises of a number of undertakings active in the sector of euro interest rate derivatives based on Euribor benchmark rates,” but that it had not opened a formal investigation.

“Regulators in the US, UK and European Union have been examining how Libor is set, while Japan’s securities watchdog has probed Tibor,” according to Bloomberg.

Comco’s statement notes:

“The London Interbank Offered Rate (Libor) and the Tokyo Interbank Offered Rate (Tibor) are reference rates which are aimed at reflecting the interest rate level in the interbank deposit market. The British Bankers’ Association (for Libor) and the Japanese Bankers’ Association (for Tibor) calculate these reference rates on a daily basis, for a range of currencies, based on submissions by respective panel banks. Derivative traders working for a number of financial institutions might have manipulated these submissions by coordinating their behaviour, thereby influencing these reference rates in their favour. Moreover, derivative traders might have colluded to manipulate the difference between the ask price and the bid price (spread) of derivatives based on these reference rates to the detriment of their clients.”

Comco says that assessing ‘the effects of the alleged practises on Swiss clients and companies is one of the aims of the investigation”.

©2012 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.

Swiss media, political reaction won’t comfort Wegelin

ZURICH, SWITZERLAND – Wegelin, Switzerland’s oldest private wealth management bank 2 February became the first bank outside the United States to be charged with fraud by the US Department of Justice (DOJ). It has been summoned to appear in a US District Court in Manhattan, New York 10 February.

The bank, which has no US offices, announced 27 January that it was, for business purposes, closing its doors, after selling off the bulk of its business, all non-US business, to Swiss bank Raiffeisen. It said in a statement last week that “Wegelin & Co. Private Bankers will remain in existence to finalize the closure of all remaining US client relationships and to continue the negotiations with the US justice authorities.”

The DOJ announced, in a long and detailed press release, that the bank “was indicted today for conspiring with US taxpayers and others to hide more than $1.2 billion in secret accounts and the income these accounts generated from the Internal Revenue Service (IRS).” The Justice Department announcement (read in full) 2 February notes that “This is the first time an overseas bank has been charged by the United States for facilitating tax fraud by US taxpayers.”

Several Swiss media and political figures responded to the detailed charges against the bank with astonishment that after the 2008 UBS debacle other Swiss banks could have taken the risk and flirted with breaking Swiss law in their attempts to woo former UBS American residents. TSR carries several video and audio clips, including an interview with Geneva legal specialist Marc Henzelin, who points out that there are far more “transactions” or deals in the US legal system than in Switzerland and the bank’s representatives must now start their negotiations. Politicians heading into a meeting with the Swiss Federal Council Friday were critical of Wegelin’s behaviour.

Bank used secretive methods to woo clients, says DOJ

Preet Bharara, US Attorney for the Southern District of New York, is cited in the DOJ statement: “As alleged, Wegelin Bank aided and abetted US taxpayers who were in flagrant violation of the tax code.” In particular, it is accused of using secretive methods to obtain former UBS clients after Switzerland’s largest bank paid a fine to the US and stopped servicing US-domiciled Americans in 2008.

The undeclared money was held in Wegelin accounts belonging to 100 US taxpayers, people domiciled in the US, according to the indictment, which covers the bank’s activities from 2002 to 2011.

A second indictment was filed against the bank and three employees, all residing in Switzerland: “Wegelin is charged in a superseding indictment with Michael Berlinka, Urs Frei and Roger Keller, three client advisers at the bank”, the result of Wegelin using its correspondent bank UBS to issue payments to US-based clients. Government officials seized $16 million in Wegelin’s correspondent account at UBS in Connecticut as a result of that indictment.

The trio face up to “five years in prison, a maximum term of three years of supervised release and a fine of the greatest of $250,000, or twice the gross gain derived from the offense or twice the gross loss to the victims”, according to the Department of Justice Tax Office. They have not been arrested, the indictment points out.

Warfare vs negotiations

The story is being widely covered by major US and financial media, which have mainly republished the DOJ announcement, including Bloomberg and the New York Times. Reuters writer Lynnley Browning, who frequently covers Swiss banking and US tax issues, often citing a source in the US government, has added a number of details from the indictment itself. She characterizes the ongoing Swiss-US double taxation treaty negotiations as a “row”: “On Tuesday, the Swiss finance ministry handed US authorities encrypted data on bank employees who served US clients suspected of dodging taxes, and said it would only provide the key to decipher the data once the row was settled.”

Swiss President Eveline Widmer-Schlumpf told a parliamentary tax commission that one part of the negotiations involves finding a “global solution” to charges against an additional 10 banks, including Credit Suisse.

Swiss president continues to seek “lasting solution” to avoid continually digging up the past

She met with US Secretary of the Treasury Timothy Geithner in Davos last week and said afterwards that she had made clear “Switzerland’s concern for a lasting solution to be found in the tax dispute with the USA.” She told Swiss media after Davos that both countries are interested in finding a solution that will end recurrent US investigations into Swiss banks. “We’re investing a lot of time in finding a solution, as are the Americans, and sometimes we move ahead and sometimes we aren’t able to, but we now must find a solution. I don’t want to find us, every year, discussing all over again how to resolve problems from the past.”

Martin  Naville, head of the Swiss-American Chamber of Commerce, on Swiss television over the weekend rebutted media attempts to profile that talks as warfare. “We are in a process of negotiations, not at war,” noting that Switzerland’s move to hand the US encrypted data is a normal part of negotiations, where “you have to give something from time to time.”
TSR report, Fr

Update: we have had to remove the video from this page because of a TSR technical problem that made the sound come on automatically if GenevaLunch opened on your screen; our apologies for the inconvenience.

PARIS, FRANCE / GENEVA, SWITZERLAND – The French high court (Cours de cassation) in Paris published a ruling Tuesday 31 January that data stolen in 2007 from British bank HSBC in Geneva by its employee Hervé Falciani cannot be used by French tax authorities because it was illegally obtained. Falciani turned over the list of more than 15,000 bank accounts to the French tax office and Nice attorney general Eric de Montgolfier. France identified 3,000 of these as falling under French tax jurisdiction and shared the remaining data with Italy and Portugal.

Swiss news agency ats cites French media as saying that only 800 of the accounts have been reviewed, and the remaining account holders, if they are not yet tax compliant, have nothing to fear from the data theft. The Swiss agency cites “informed sources” as saying that French tax officials knew the information could not be used, but held the data over clients’ heads to pressure them into identifying themselves to the tax office.

Background, GenevaLunch: Falciano and HSBC data theft

Regional trains, especially in border areas, suffered losses as tourism dropped when the franc climbed

BERN, SWITZERLAND – Four rail groups are receiving CHF21 million in aid from the Swiss government to offset some of the losses they suffered in 2011 due to the rapid increase in the value of the Swiss franc during the year.

All four provide transalpine shipping and use combined or piggyback cargo transport, carrying trucks to reduce the environmental impact on the Alps.

The government in 2011 set aside more than CHF28m in credit for which companies could apply, showing the losses directly linked to the currency’s sudden rise. Four presented their figures at the start of 2012 and will be helped out of the funds set aside: BLS Cargo, CFF Cargo International, Crossrail and TX Logistik.

Another CHF11.2m was distributed in December 2011 to a number of transport companies, mainly regional, which lost money because of a sharp fall in tourism due to the high franc.

ZURICH, SWITZERLAND – UK and Swiss banking regulators are reported by the Wall St Journal to be planning to fine Swiss bank UBS for shortcomings in supervising risky trades. The newspaper cites “people close to the situation”, noting that regulators from the two countries will complete their investigations by mid-February into the $23. billion loss by trade Kweku Adoboli.

The former UBS employee pleaded not guilty Monday morning 30 January in London to charges of fraud.

Zurich airport

ZURICH, SWITZERLAND – More morning and evening flights, but fewer flights over southern Germany from Zurich: this is the tradeoff agreed to by Switzerland and Germany, which announced Saturday 28 January they have signed an agreement to reduce noise.

The new accord is expected to go into effect in the summer of 2012.

Noise reduction in the southern German air corridor has been a contentious issue for a number of years and the two governments said in announcing the agreement that they also hope new developments in airplane technology will ease the situation.

Swiss, one of the main airlines using the corridor, has said it will be replacing half of its fleet there by 2020, according to TSR.

Switzerland has said it needs more flexibility for flights in and out of Zurich, particularly in the morning.

Zurich Airport had 20,911 “movements” of planes in December 2012, up 1.7 percent from a year earli.

ZURICH, SWITZERLAND – US pressure on the Swiss banking world appears to have claimed one more victim, with the announcement by St Gallen-based Wegelin, generally considered the country’s oldest bank, to sell most of its wealth management business to Raiffeisen in an effort to protect its employees and clients.

Wegelin one of 11 banks investigated by US, 2 countries finance ministers set deadline

The news comes just a day after Swiss President Eveline Widmer-Schlumpf told reporters in Davos that the US and Switzerland hope to conclude tax treaty talks by the end of 2012. She made her remarks after meeting with US Treasury Secretary Timothy Geithner at the World Economic Forum.

The discussions have been the subject of much media speculation, both for their timeline and a likely financial settlement, with some reports in late 2011 that Switzerland had proposed  amounts, information denied by the Swiss Tax Office to GenevaLunch.  Bloomberg/Business Week quotes the president as saying that “I have expressed that we’ve been in talks for a year, that we’ve invested a lot of time and energy to propose a fair solution,” adding that the two have discussed amounts and that “our aim, and he agreed, is to find a solution where we won’t be confronted with a question about the past every year.”

Reuters noted that the amounts are “possible fines [Switzerland's] banking industry will have to secure a global civil settlement with US authorities” and that Switzerland “is also trying to get the U.S. Department of Justice to drop criminal probes of 11 banks, including Credit Suisse and Julius Baer. “‘I assume we will be able to sort it out for these 11 banks as well as for the banking sector as a whole,’ she said.”

What next for Wegelin clients, staff

A statement issued by Wegelin and Raiffeisen says that “a substantial majority of clients and staff will be transferred to Notenstein Private Bank Ltd, which will become a 100% subsidiary of Raiffeisen for an undisclosed sum. This transaction enables Raiffeisen to substantially strengthen its position in wealth management. Wegelin & Co. Private Bankers will remain in existence to finalize the closure of all remaining US client relationships and to continue the negotiations with the US justice authorities.”

Read more…

Migros baby slippers: recalled for safety reasons

BERN, SWITZERLAND – Migros is alerting the public to blue and white baby slippers with a moose head decoration that it is recalling for quality problems: parts on the moose head can come loose and pose a safety risk to small children. The slippers have been sold since July 2010. Article number: 8923.023, price CHF12.90. Contact your nearest Migros to return them.

©2012 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.

Aerial view of the Graubuenden resort Davos, where the World Economic Forum 2012 is meeting (photo: ©2012 WEF / www.swiss-image.ch, Andy Mettler

GENEVA, SWITZERLAND – Rich versus poor appears to be the emerging theme used by journalists covering this year’s World Economic Forum in Davos. The WEF opened Wednesday morning 25 January with 2,600 participants, mainly heads of state and ministries, and corporate leaders, with some 700 journalists in the wings. The official theme, unveiled a week ago, calls for a new face for capitalism.

This is the 42nd such annual gathering organized by the Geneva-based organization, and it remains the group’s key activity, even though it has branched into organizing other events and it publishes several reports, including the annual Global Competitiveness and Global Risks reports.

Angela Merkel opens the event official Wednesday afternoon.

Journalists have very limited access to the celebrity participants and partly as a result of this much attention was focused in the days leading  up to the event on protesters sitting outside, some of whom are living in Mongolian-style tents or igloos. Some but not all appear to be part of the Occupy movement that has protested against capitalism in a number of places in recent months, including near Wall Street in New York.

Reuters talks about the spirit of hope, while Al-Arabiya talks about the gloom; Bill Gates, for his part, is talking about his charity work.

Links to other sites, WEF opening coverage: Al-Arabaya, Aljazeera, BBC, CNN, New York Times, Reuters

Club increasingly international in its membership but retains American leader

AmClub's new president, Ed Karr

GENEVA, SWITZERLAND – Americans’ reputation for being dynamic and enthusiastic won’t suffer at the hands of Ed Karr, Geneva businessman and the new president of the American International Club of Geneva, which also calls itself AIC.

Karr, 42, is a partner in RAMPartners SA, an investment banking and investment management firm in Geneva, and he’s also known around town for his role as co-chairman of Republicans Abroad Switzerland.

He’s one of the youngest presidents in some years of the 60-year-old AIC, believed to be the oldest American club of its kind outside the US.

Karr is enthusiastic and realistic in equal parts about being a member of what he calls “the best business club in town” at a time when all clubs are feeling the pinch of global economic blues, being an American abroad during a period when the US is coming in for some heavy criticism, and enjoying the pleasures of an international life.

He is married to an Italian and has lived in Geneva since 1997. “We like the city, we like the lifestyle—we really like living here.”

“General specialist” at heart of Geneva’s fastest growing fields: trading, high tech, health care, energy

RAMPartners is a group of six people with backgrounds in institutional brokerage. “We’re independent. We’re general specialists. I know the markets, structures, how markets trade, relationships. We do a little due diligence and screening and we have several specialists available. I’m an expert at finding the experts.” He offers as an example a 3D bioprinting project that was introduced to him, technically capable of printing a new heart (and named one of the 50 best inventions of 2010 by Time Magazine). The project looked exciting, he says, “but I’m not a doctor so I call people I know who specialize in biomedical investments.”

The firm was set up in 2005 and it has helped raise more than $200 million for small capitalization companies in fields such as natural resources, high technology, health care and clean energy. Futures Magazine named Karr as one of the world’s Top Traders” in 2004.

Karr brings his business acumen and contacts to AIC’s leadership. The club itself has for some time reflected changes in the foreign population in the Lake Geneva region. Membership is down from a peak of 1,300 some years ago to 900 today. “It’s tough—all the clubs are struggling to survive,” he says, with declining membership, costs going up and sponsorship down.

Impact of Americans renouncing citizenship

Read more…

Zurich company to help increase Unilever’s sustainability efforts

ZURICH, SWITZERLAND – Barry Callebaut and Unilever Monday 23 January signed a long-term partnership agreement that will double the cocoa and chocolate the Swiss-based company delivers to the Dutch-based consumer goods and foods producer. Barry Callebaut will invest CHF22 million under the terms of the agreement to ramp up to “provide 70 percent of Unilever’s global cocoa and chocolate products”.

Unilver is looking to ice cream products in particular to double sales while reducing environmental impact. The Zurich chocolate company has already helped build sales significantly with the Magnum ice cream line. Unilever has come under pressure, along with other multinationals, for its use of chocolate that is not certified Fair Trade. The company notes on its web site that “cocoa accounts for 4 percent of our total volume of agricultural raw materials. We buy 1 percent of global production, 95 percent of which is used in our ice cream, including in our biggest global ice cream brand Magnum and in Ben & Jerry’s.”

Monday’s press release from Barry Callebaut about the new partnership terms notes that “Barry Callebaut has also been working closely with Unilever to meet its sustainable cocoa sourcing commitments.”

CNN Friday 20 January ran a major investigative news background story on child labour in the cocoa industry, which has resulted in some calls for boycotting chocolate. As part of the network’s series, it contacted the chocolate industry for companies’ responses.

The Zurich company has been addressing the issue for some time and has considerable consumer information on the industry-wide problem.

Details of the deal were not revealed.

13-year high in car sales in Switzerland in 2010

New cars in Switzerland: December 2011 registrations were all-time record

GENEVA, SWITZERLAND – The Swiss Automobile Importers Association has come out firmly against Bern’s announcement last week that the autoroute sticker (road tax) price will jump from CHF40 to 100. Its argument, in aligning itself with truckers associations, is that some of the road tax money will be used to finance the country’s rail system starting in 2030, but the group also argues that the federal coffers have a reserve of 1.7 billion for roads and the tax should not be increased until this falls to CHF0.5 billion.

The rationale for the announced increase is to speed up road improvements that are needed as the number of cars on the road grows quickly. The importers association has just published figures showing that the past two years have seen a significant hike in the number of cars imported into Switzerland, which does not have a major car manufacturing company of its own.

The Swiss Automobile Importers Association notes that in 2011 the country imported and sold 318,958 and by comparison in 2010 the figure was 294,239 cars. The 2011 sales show a 10.6 percent increase in the past two years, with a year-on-year increase of 8.4 percent in 2011 alone.

Last year was the first in a decade when more than 300,000 new cars were registered in Switzerland and the only previous years when sales were higher  were 1988, 1989 and 1990. December 2011 is the best sales month that the importers association has ever recorded.

The association points out that new Swiss CO2 reduction regulations for cars go into effect in May 2012 and must be applied to all new cars registered as of 1 July 2012. The change aligns Switzerland with European Union regulations. The one exception is cars brough in from abroad that were registered abroad at least six months before they are imported.

Are you reading our 3 millionth page on GenevaLunch tonight? If so, let us know!

GENEVA, SWITZERLAND – We’d like to share a bit of great Friday night news: GenevaLunch in the next few minutes will hit the 3 million pages viewed mark. If you think nothing ever happens in the Lake Geneva region, you’re wrong – just ask the people who have read 3 million pages of news and information in the past five years. We’re small, non-profit, staffed by volunteer journalists, and we started with nothing much in 2006, but we’ve managed to make sure you know what’s happening in the area.

By way of thanks to all of you, we’re offering gifts to those we think come closest to being the 3 millionth page reader from Switzerland, France and our other main countries for visitors, Canada, the US and the UK. Check it out on Facebook!

NEUCHATEL, SWITZERLAND – Freight carried by road and rail increased by 2 percent in 2010, showing some recovery after a 9 percent drop due to the faltering economy in 2009.

The new figures are the most recent annual ones for the industry, published by the Swiss Statistical Office in Neuchatel.

GENEVA, SWITZERLAND – Heritage Manufactury’s Tensus model has been awarded the top prize, the Superwatch, at the annual Geneva Time Exhibition, for its near-perfect timekeeping precision. The watch has 300 components.

Cabestan was given the coveted Design Award for its Trapezium model, which defies the laws of geometry: from every angle it appears to be trapezoid in form.

The Geneva Time Exhibition, which brings together 52 watchmakers this year, is a professionals’ fair for top-end specialty watchmakers, and in its third year is gaining a reputation as a showcase for the best of Swiss watch design. The exhibition is open to the public Friday 20 January, the final day of the show.

Click on images to view larger

By William New

(republished with permission from Geneva-based Intellectual Property Watch)

Stimreise, one of the many groups to offer evening concerts in the magical setting of the lakeside Chateau de Chillon

LAUSANNE, SWITZERLAND – Switzerland’s most popular tourist attraction, the Chillon Castle near Montreux, welcomed nearly 340,000 visitors in 2011, an increase of 10,000, despite the high Swiss franc.

The bulk visit during the day, to see the castle itself, and last year saw a record number of these tourists: 326,287. Another 13,000 visited for concerts and other evening events.

Swiss tourists account for just under 30 percent of the visitors, with foreigners 70.1 percent.

NYON, SWITZERLAND – Novartis will not close its Prangin site and all jobs there will be saved, the company will be investing more money in the plant, canton Vaud will give the company a tax break and some of the unused space will be developed into housing. Tough talks between Novartis workers and managers, the town of Nyon and canton Vaud resulted in a series of agreements unveiled Tuesday afternoon 17 January in Nyon.

The company’s announcement 25 October that it would be cutting 1,100 jobs in Switzerland, some 300 of them in Nyon, was met with anger at the time, but the company agreed to talks, with local and regional authorities intervening.

Some of the Basel jobs will also be saved as part of the agreements.

Novartis announced 13 January that it is cutting 2,000  jobs in the US.

Ed. note: La Cote provides details online; the local newspaper usually protects most of its news behind a paywall, but this is free of charge.

GENEVA, SWITZERLAND – The 3.8 billion pages in English published by Wikipedia will not be accessible Wednesday, the Wikimedia Foundation that runs the site has announced, in protest against pending US legislation that it believes will seriously damage the free Internet. “The blackout is a protest against proposed legislation in the United States—the Stop Online Piracy Act (SOPA) in the US House of Representatives, and the PROTECT IP Act (PIPA) in the US Senate—that, if passed, would seriously damage the free and open Internet, including Wikipedia,” the group says on a web page.

The decision was a tough one to make, given Wikipedia’s insistence on remaining neutral about information, it points out. But the largest-ever Wikipedia online discussion, involving some 1,800 “Wikipedians” or volunteer contributors to the site, agreed. Sue Gardner, the foundation’s CEO, writes that  “although Wikipedia’s articles are neutral, its existence is not. As Wikimedia Foundation board member Kat Walsh wrote on one of our mailing lists recently,

We depend on a legal infrastructure that makes it possible for us to operate. And we depend on a legal infrastructure that also allows other sites to host user-contributed material, both information and expression. For the most part, Wikimedia projects are organizing and summarizing and collecting the world’s knowledge. We’re putting it in context, and showing people how to make to sense of it.

But that knowledge has to be published somewhere for anyone to find and use it. Where it can be censored without due process, it hurts the speaker, the public, and Wikimedia. Where you can only speak if you have sufficient resources to fight legal challenges, or, if your views are pre-approved by someone who does, the same narrow set of ideas already popular will continue to be all anyone has meaningful access to.”