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BERN, SWITZERLAND – The Swiss financial surveillance body Finma will be keeping a closer eye on Swiss banks, particularly the two big banks UBS and Credit Suisse, under rules approved by the governing Federal Council Wednesday 23 May. Finma will work more closely with corporate auditors and strengthen its field team with the goal of keeping a close eye on banks’ risks.

Finma was established in 2009 shortly after UBS was bailed out by the federal government. Its activities cover the entire financial industry. Under the new rules, drawn up based on Finma’s initial three years of experience, banks have an ad hoc Finma unit that will work more closely with the central bank and bank surveillance groups abroad to keep a close eye on the banks’ markets activities.

Supervisory Instruments and the Organisation of FINMA, report prepared for the Federal Council, November 2011

Foreign workers make up a significant part of the seasonal construction industry in Switzerland

BERN, SWITZERLAND – A record 27,000 foreign workers’ salaries and working conditions in Switzerland were checked in 2011 for suspicion of abuse, in particular for underpayment. The number of short-term labourers (three month contracts) brought into Switzerland rose, which accounts in part for the increase in suspected cases of labour force abuse.

Traditionally, about half of those checked are sanctioned and while the others may not found to be abusive once investigated, a number are considered minor infractions and the company is allowed to simply pay its workers what is owed without being sanctioned.

Three groups investigate companies that are suspected of salary abuse. The cantons checked 7,200 Swiss companies with foreign employees and 7,000 foreign firms. Organizations that work with companies with collective contracts checked 11,000 foreign companies and 7,500 Swiss companies. And 5,600 self-employed workers had their status checked to ensure they were working legitimately, and about 10 percent of these were found to be “fictive”, says Bern.

Companies with collective contracts less often under suspicion

Companies with collective contracts saw the number of their cases slip to 9 percent for Swiss companies and 14 percent for foreign companies. But the figures were much higher for other firms: 35 percent of  foreign companies were suspected of underpaying workers and 26 percent of Swiss companies, although the latter fell from 41 percent the previous year.

The investigations lead last year to salary adjustments and fines paid in 80 percent of cases for foreign companies and 70 percent for Swiss ones. Seco, the economy ministry, notes in its report that the presence of work inspectors is clearly effective and important to avoid labour market abuses.

Jean Studer named bank commission president

Thomas Jordan, new head of the Swiss National Bank

ZURICH, SWITZERLAND – The new head of the Swiss National Bank is Thomas Jordan, as widely expected, in the role of chairman of the governing board. Jean-Pierre Danthine has been named vice-chairman of the board and Fritz Zurbrügg has been named to the board by the Swiss Federal Council.

Jean Studer, a member of the government in Neuchatel and head of the Department of Justice, Security and Finance of the canton Neuchâtel, has been named president of the Bank Council that overseas the central bank.

The SNB provides this bio for Jordan, who has been acting chairman since Philipp Hildebrand’s resignation 9 January.

“Thomas Jordan (born 1963) joined the Swiss National Bank in 1997. With effect from mid-2004, the Federal Council appointed him as Alternate Member of the Governing Board, from the beginning of May 2007, as Member of the Governing Board, and from the beginning of 2010, as Vice Chairman. Thomas Jordan is Chairman of the Board of Directors of StabFund, the stabilisation fund, and represents Switzerland on the Financial Stability Board’s Steering Committee and on the Committee on the Global Financial System at the Bank for International Settlements (BIS). Thomas Jordan is also an Honorary Professor at the University of Bern, Chairman of the SNB’s Study Center Gerzensee Foundation and Chairman of the International Center for Monetary and Banking Studies (ICMB) in Geneva.”

Jordan has said that he remains in favour of enforcing the Swiss franc 1.20 cap against the euro, a policy that Hildebrand began.

Jordan will head Department I in Zurich, covering economic affairs, international affairs, monetary cooperation, legal and property services, as well as support functions.

Danthine will be responsible for Department II of the SNB, which handles financial stability, cash, and finance and risk, mainly from Bern.

Danthine;s background:

“Prior to his appointment, he was Professor of Macroeconomics and Finance at the University of Lausanne, and had been Managing Director of the Swiss Finance Institute since the year of its foundation. Jean-Pierre Danthine is also a member of the Markets Committee at the BIS, Fellow of the European Economic Association, and member of the Academia Europaea. In addition, he sits on the KOF Executive Committee of ETH Zurich.”

Zurbrugg will head Department III, financial markets, banking operations and information technology:

“Fritz Zurbrügg (born 1960) has been Director of the Federal Finance Administration since 2010, where he had been Vice President since 2006. From 2002 to 2006, he held the position of Executive Director of the Swiss-led constituency of the International Monetary Fund (IMF) in Washington, after having been a Senior Advisor there since 1998. Fritz Zurbrügg has broad experience in international monetary matters. He was Head of Section for international monetary matters in the Federal Finance Administration from 1994 to 1998. From 1992 to 1994, he was an economist at the IMF’s Africa Department. Fritz Zurbrügg received his doctorate at the Faculty of Law and Economics at the University of Bern in 1989. From 1985 to 1989, he was assistant at the Institute of Economics at the University of Bern.”

New chairman not yet named, but expected Wednesday morning

The Swiss National Bank has offices in Bern, next to the seat of the federal government (here) and in Zurich

ZURICH, SWITZERLAND – The Swiss National Bank governors meeting in Zurich Wednesday 18 April are expected to name a new chairman to lead the central bank.

Zurich media rumours fed by newspaper NZZ have had it for the past two weeks that Thomas Jordan, acting chairman, will be given the job as a permanent post. He was given the temporary position after the 9 January resignation of Philipp Hildebrand.

The board announced after the meeting was underway that the bank has approved stricter rules concerning staff private financial transactions, in the wake of criticism after Hildebrand’s wife made currency transactions that ultimately led to his resignation.

Hildebrand’s financial accounts were investigated and he was cleared of wrongdoing, but the affair prompted a review of the bank’s internal rules.

Wednesday morning the bank announced it has created an independent compliance unit that reports directly to the chairman “and, if necessary, directly to the chairman of the Audit Committee of the Bank Council. In addition, a unit will be set up to which staff can report irregularities and infringements of regulations.”

The bank has written into its regulations the measure taken at the start of the year, a requirement to seek approval for all foreign exchange transactions over CHF20,000. In addition, “The holding period for financial investments has been extended, transactions in derivatives or structured products whose value is largely determined by movements in exchange or interest rates are now wholly prohibited, and further restrictions have been instituted for certain groups of staff with access to privileged information. Moreover, the control process and disclosure requirements have been enhanced and extended.”

Geneva, Switzerland: candidate to host the Green Climate Fund permanent secretariat

GENEVA, SWITZERLAND – Switzerland officially presented Geneva Thursday 12 April as a candidate to host the Green Climate Fund permanent secretariat. Switzerland is also running for a seat on the GCF’s Executive Board.

Germany and South Korea are currently the only other candidates. The provisional seat is in Bonn.

The GCF was created in 2010, with the Cancun agreements, and is designed is to administer tens of billions of dollars to  help developing countries reduce their greenhouse gas emissions and “undertake the measures necessary to adapt to climate change”, says Bern.

In the start-up phase, the World Bank is to act as trustee for the GCF in its start-up phase. The Fund is scheduled to have a permanent secretariat by 2014.

Bern and the canton of Geneva argue that the city is well-suited to be the GCF’s host, noting in a federal government statement that Geneva is “a strategically significant location for political and scientific work in the environmental domain, and increasingly in the climate domain as well. The GCF fits very well into this institutional landscape and can contribute significantly to enhancing international Geneva.”

It lists other agencies and groups that make up this “a major hub for international environmental policy “:

• the headquarters of the World Meteorological Organization
• the Secretariat of the Intergovernmental Panel on Climate Change, and the Global Earth Observation Initiative.
• in 2011 Geneva was designated as the location for the Secretariat of the Global Framework for Climate Services.
• A Regional Office of the United Nations Environment Programme is located in Geneva.
• the World Bank and the UNDP, active in environmental financing, have offices in Geneva.

Fruit and wine from Switzerland, where resistance to patents on plants and animals is growing

BERN, SWITZERLAND – Two major Swiss organizations, humanitarian agency Swissaid and the non-profit group Bern Declaration, called Wednesday morning 4 April for “urgent political action” to be taken in light of the “No patents on seeds” report, made public today. The report indicates that despite a European Patent Office (EPO) decision at the highest level in 2010 to ban patents on plants and animals, a dozen such patents were issued in 2011.

Both groups are members of the No patents for seeds international coalition, which in a press release gives the background to patents issued in 2011:

“The report gives examples of patents on sunflowers, melons, cucumbers, rice and wheat. Patents were granted despite a decision of the highest court of the EPO (Enlarged Board of Appeal) in 2010, reaffirming the prohibition of patents on conventional breeding as written in European patent laws. As the new report shows, industry and examiners at the EPO are systematically using legal loopholes to grant patents on seeds, plants and even harvest and food products derived thereof. “

Some 100 requests were registered in 2011, the report shows, 12 of them successful, for patenting plants that are the result of traditional plant selection methods. This brings to 2,000 the number of plant patent and to 12,00 the number of animal patents, issued by the EPO at the end of 2011, with or without the genetic code patented as well.

In addition to the plant patents, another dozen were granted for “farm animal breeding claiming breeding material, sex selection, marker assisted selection, cloning or genetic engineering”, says the coalition.

“These patents restrict biodiversity, have a negative impact on innovation, reduce farmers’ options and make food suppliers and consumers more dependent on them,” says François Meienberg of the Bern Declaration in a press statement. “It’s urgent for European and Swiss lawmakers to put the brakes on this form of predatory pricing.”

Germany has passed a law against such patents.

“No patents for seeds” report, 4 April 2012 (English)

GENEVA, SWITZERLAND – The jobless rate in the eurozone rose to yet another record high of 10.8 percent, up from 10.7 percent in January, figures released Monday 2 April show. The BBC reports a number of economists now in agreement that the euro area is in recession. Ironically, the Daily Telegraph in the UK publishes a report today indicating that fears of a recession are diminishing among business leaders in Britain.

The Guardian reports that recession worries are growing and points to the youth jobless rate: “While the total youth unemployment rate across the eurozone inched higher top 21.6%, it is running at twice that level in some countries. In Spain, 50.5% of under-25s are now out of work. In Portugal, the figure is 35.4%, compared with 32.2% in Belgium and 31.9% in Italy.” German and Austrian youth unemployment is just above 8 percent, however.

El Pais (Spa) focuses on the youth jobless rate, while Le Monde (Fre) Saturday wrote that the new agreement to strengthen the “firewall” that guarantees some level of bailout is not enough to provide the level of reassurance the world seeks over the eurozone debt crisis.

Nyon's rivers tumble down from the Jura and into Lake Geneva, but their passage through the urban area is weaking their role as key ecological corridors

NYON, SWITZERLAND – The Asse and the Cossy, two rivers that run through Nyon, are getting a tree-trimming this week, part of a larger project to return the waterways to a natural state.

Helicopters were operating last week and will return to the job Tuesday 13 March to remove dense tree growth in the wooded corridors by the rivers. The tree-cutting is designed to rejuvenate the woods by encouraging younger growth.

The “renaturalization” project involves finding ways to help the rivers sidestep the built-up urban area, which includes concrete that stops the natural link between the lake and the rivers’ sources.

Local Nyon television and the commune have gone to some lengths to explain to town residents that clearing logs by helicopter is cheaper and reduces the nuisance to the population because the job can be done more quickly.

The Asse runs 12km from its source at the foot of the Jura in Bonmont’s Marais des Bœufs des bois. It is a main ecological corridor between the Jura and Lake Geneva, but just as it enters Nyon its ecomorphology is poor and fish are unable to head upstream because of the concrete.

The Cossy is also over-urbanized, say Nyon authorities, with more than half of its length in tubing. It is not a fishing area but a more natural state will encourage small fauna in the area, who are a key to maintaining the overall ecological balance in the region.

The project’s three objectives:

safety against flooding
to make the rivers as natural as possible between the route de Signy and la Môrache
to restore the wooded corridors that accompany the rivers through a programme that encourages younger growth.

Friday is the last day to change your aging French francs for euros

Old French francs: last day to exchange them for euros is 17 February 2011

GENEVA, SWITZERLAND – Exactly 10 years ago the French franc was put to rest as France’s currency, and today is the last day any of those old bills can be exchanged for euros at banks in France. The government has been calling on citizens to come in early, and not wait for the final day, but a spokesperson for the Bank of France told news agency AFP that they were nevertheless seeing a sudden rise in people bringing in old bills.

Le Point reports that at the end of 2010 some 50 million bills were still in circulation, with a value of euros 602 million.

TSR points out that it’s not all old French money, since the deadline is long past for turning in coins and a number of other bills. The ones you can still exchange, until the banks close today: Pierre and Marie Curie (500 francs), Gustave Eiffel (200 francs), Cézanne (100 francs), Saint-Exupéry (50 francs) and Debussy (20 francs).

If you’re heading for the bank be sure to take legal identification with you. You’ll find the exchange rate and the list of banks on the official site, Je change mes francs. The 20 franc note is worth euros 3.02, to give you an idea.

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.”

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ZURICH, SWITZERLAND – One of Switzerland’s worst spots for traffic jams will get some breathing space, with the Federal Highway Office approving a plan to widen the road from four to six lanes over 12 kilometres of the A1. A 3,300 metre-long additional tube will be added to the Gubrist tunnel.

The project, at a cost of CHF940 million, covers several works: the Weiningen and Affoltern intersections will be redone, a 750 metre viaduc will be built at Katzensee, anti-noise devices are being installed and a new drainage system will be built.

The project has been contentious, particularly over covering the west end of the Gubrist tunnel entrance, which the highway department rejected but which the commune of Weiningen has demanded. Federal, city and village authorities are now involved in talks to find a solution without delaying start of the construction project.

In addition, 113 property owners objected to the price they were offered for the land they are obliged to cede for the project, but their objections were overruled.

By William New

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

Taxpayers get CHF1 billion via federal, cantonal budget boosts

ZURICH, SWITZERLAND – Swiss federal and cantonal budgets look set to receive some CHF1 billion from the Swiss National Bank, which expects to end 2011 with a profit of CHF13 billion. A little over one-third of the profit, CHF5b, is thanks to the meteoric rise of the price of gold during the year. The other CHF8 billion is due to foreign currency positions.

The consolidated result for the year is “likely to be somewhat better” as UBS repays its 2008 bailout debt through what is called the stabilization fund.

The other CHF12b will be distributed roughly as follows:

• allocation to provisions for currency reserves, CHF3.2 billion
• CHF5b to fill the gap in the distribution reserve that goes to the Confederation and the cantons
• remaining profit to the distribution reserve.

Definitive figures and details, including movements in foreign currency positions during the year, will be released 8 March.

SNB chairman Philipp Hildebrand, who resigned following a scandal over dollars purchased by his wife, has been praised this week by a number of financial leaders outside Switzerland for his exemplary work as a central banker. EU Central Bank President Mario Draghi told a Frankfurt press conference 11 January that “we all regret the developments that led to Mr Hildebrand’s resignation because I think we will miss a very, very good central bank governor.”

Ed. note: The Financial Times has published a commentary on the implications for European financial leadership of Hildebrand’s tenure at the SNB (free, registration required)

IT whistleblower says lawyer took advantage of him

Philipp Hildebrand, former chairman of the Swiss central bank

ZURICH, SWITZERLAND – Swiss central bank chairman Philipp Hildebrand, age 48, has just resigned, effective immediately, but the scandal over the theft of private bank data and the financial transactions of Hildebrand’s wife is not likely to die down quickly.

He had worked for the bank since 2003 and was named the youngest ever chairman in January 2010.

Hildebrand said at a press conference last Thursday, 5 January, that he would remain in office as long as he had the support of the Swiss Federal Council, the cabinet. He called for reform in the wake of the scandal, including greater transparency on the part of central bank governors about their own financial transactions. Full text of HIldebrand press conference presentation (pdf)

He denied wrongdoing, saying that the CHF60,000 profit on currency transactions from August to October 2011 was his wife’s responsibility; a Bank Council investigation as well as one done by PricewaterhouseCooper’s support his claim. Hildebrand’s wife is a former currency trader who now owns a Zurich art gallery and the transactions were reportedly on behalf of her business.

But observers including a number of politicians have said in the past week that even if the central banker respected the letter of the law, and even if the law needs to be changed, he acted irresponsibly. Bloomberg/Business Week quotes Peter Kunz, head of business law at the University of Bern, as saying it’s “absolutely incomprehensible” that the relatives aren’t included in the regulations. “‘From a legal point of view, Ms Hildebrand’s dollar trade isn’t problematic,’ he said. “From the point of view of morality, experienced economic experts like the Hildebrands should know that a spouse’s trades are not without problems.’”

Kashya Hildebrand’s purchase of $500,000 in August, and sale of them in October, came during a period when the Swiss franc continued to climb against the dollar and the euro. Her husband had responsibility for Swiss monetary policy and capped the over-valued franc.

The banker is scheduled to issue a statement and copies of documents at 15:15 Monday, shortly after announcing his resignation. He was earlier scheduled to appear before parliament Monday afternoon to answer questions and share documents. Parliament still has a press conference scheduled for 18:00.

The unfolding story over the weekend centred, not around Hildebrand, but the man who stole the data, who contacted three Swiss media to say he has been abused.

UDC, lawyer and IT employer tell different tales

The 39-year-old IT worker says he turned to a lawyer with the information about Hildebrand’s accounts, not because he wanted to be a whistleblower or to have the information widely published, but because he wanted to understand the significance of the information he had viewed.

The man, who lost his job at Bank Sarasin after turning  himself into police, copied data from the private accounts of Hildebrand and shared it with an old childhood friend, now a lawyer and cantonal politician in Thurgau, Hermann Lei. The man who is being investigated for taking the information has been hospitalized and is under surveillance in a psychiatric unit for fear he will try to commit suicide.

But the details of what happened differ depending on the source: the IT worker and Lei, through his lawyer, both say they met with Christoph Blocher, former head of the rightwing UDC People’s Party, who has had an abrasive relationship with Hildebrand. Blocher has remained silent on the affair, but the UDC denies such a meeting ever took place.

The IT employee says he did not give Lei permission to turn the material over to Weltwoche, a Swiss political weekly magazine that published details a week ago, information that Lei’s lawyer denies.

SNB rules tightened Saturday, but parliament wanted more answers

The Bank Council, which oversees the Swiss National Bank, announced after an extraordinary meeting Saturday that it was tightening rules to include family members of the governing board and to reduce to CHF20,000, effective immediately, the amount of foreign currency board members can trade without advance clearing.

See also: GenevaLunch background stories on Hildebrand and the SNB

Dollars, francs, euros pounds, yen - a little sweetener added by central banks Wednesday

BERN, SWITZERLAND – The Swiss National Bank (SNB) WEdnesday 30 November joined with other major central banks for a series of “coordinated actions to enhance their capacity to provide liquidity support to the global financial system.

The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the SNB says in a statement issued during the afternoon.

Stock markets in the US rose on the news that came about the time markets in New York opened.

The news was a bright spark in a gloomy UK, where some 2 million workers are striking today and in Brussels, where finance ministers are holding urgent sovereign debt crisis talks.

“The euro and European shares surged on the news, which came after euro zone finance ministers agreed to ramp up the firepower of their bailout fund but acknowledged they may have to turn to the International Monetary Fund for more help,” Reuters reports.

Specifically, the central bank measures taken include:

• making it cheaper for banks to buy dollars starting 5 December: “lower the pricing on the existing temporary US dollar liquidity swap arrangements by 50 basis points so that the new rate will be the US dollar overnight index swap (OIS) rate plus 50 basis points”
• as a contingency measure: the central banks “have also agreed to establish temporary bilateral liquidity swap arrangements, so that liquidity can be provided in each jurisdiction, in any of their currencies should market conditions so warrant”, noting that for now only the dollar needs liquidity, among non-domestic currencies
• The SNB will establish a temporary network of reciprocal swap lines in cooperation with other central banks: “This action will allow the SNB to provide Swiss francs to these central banks when required, as well as enabling the SNB to provide liquidity, should it be needed, in Canadian dollars, British pounds, Japanese yen, and euros (in addition to the existing operations in US dollars). The SNB continues to closely monitor the developments in global money markets.”

The other central banks have taken some additional actions. The European Central Bank notes that “In addition, the initial margin for three-month US dollar operations will be reduced from currently 20% to 12% and weekly updates of the EUR/USD exchange rate will be introduced in order to carry out margin calls. Those changes will be effective as of the operations to be conducted on 7 December 2011.”

Analysis: Bloomberg, Reuters

The 1 December window on the 2010 Sustainable Development calendar gave us a peek at the world behind our chocolate products - two more days until you can open the new 2011 calendar windows!

BERN, SWITZERLAND – One of Switzerland’s quirky offerings is back, the seasonal Swiss online  sustainable development Advent calendar where you can have a lesson a day and take part in daily quizzes to try to win prizes, in the interest of boosting sustainability.

A bonus is the list of gift ideas to spark your imagination for suitable gifts. The project, started in 2000, is now available in five languages, to encourage broader participation worldwide.

The calendar is put together by a surprisingly rich mix of researchers, companies, educational groups, federal authorities, environmental organizations and others who are joining forces for the second year to create the online calendar (see list of partners).

For those who did not grow up with Advent calendars, the idea is that for the four weeks of Advent that run up to Christmas, you open a window a day, usually to find an interesting little gift, either visual or physical.

The windows work with themes such as green technology, especially ICT and protecting nature. The sources of information for the windows come from firms, non-governmental organizations and the Swiss government, one-third each. The windows are designed to show “affordable, pleasant or simply surprising solutions” according to the federal energy office which, with the Swiss sustainable development network, Öbu, is a major sponsor.

Examples of corporate solutions include: travel company Kuoni shows the first sustainable development certifiied agency trips; Coop supermarket chain shows how certified palm oil can be part of our consumer products; Ricola, the herbal sweets maker shows us attractive homes for bees so we can reduce their mortality rate, while canton Geneva and the town of Yverdon-les-bains show us why it makes sense to recycle the cartons used for many of our drinks.

Time flies when trade is growing rapidly; Indian Trade Minister Arnand Sharna at Baselworld 2011

BERN, SWITZERLAND – Trade between India and Switzerland, currently negotiating a bilateral free trade treaty, has grown at a “fulgerant” rate in the past 20 years, the Swiss Customs Office says. Exports from Switzerland to India grew by 18 percent in the first nine months of 2011 and have now crossed the threshold of CHF3 billion.

Swiss exports grew seven-fold from 1990 to 2010, from CHF378 million to nearly CHF2.6 billion. Imports from India grew during the same period from CHF251m to CHF901m. Trade with India has thus grown dramatically, but India remains Switzerland’s seventh trading partner, well behind China, with Swiss exports of CHF7.1b and Japan, with CHF6.43.

Chemicals account for main exports as well as imports: mainly pharmaceuticals for Swiss exports, with basic chemical products and finished ones sharing the imports from India about equally. Other Swiss exports: machines, particularly precision instruments, and electronics plus watches.

GUATEMALA – Guatemalan President Alvaro Colom has apologized to the family of former President Jacobo Arbenz who was ousted in a 1954 coup backed by the United States.

Colom has acknowledged the state’s responsibility in overthrowing Arbenz.

“That day changed Guatemala and we have not recuperated from it yet,” he said. “It was a crime to Guatemalan society and it was an act of aggression to a government starting its democratic spring.”

In addition to the apology, the Guatemalan government also agreed to revise textbooks in Guatemala to include Arbenz’ positive influence on the country, his biography will be rewritten, the national highway he built will be named after him, and a new educational program will be created to train government staff so that they always take into account the needs of farmers and indigenous people, as Arbenz promoted during his tenure, said the Guatemala Times.

Links to: New York Times, the Guatemala Times.

Dominique Strauss Kahn will meet French accuser - Photo source IMF

PARIS, FRANCE – The Parquet, or public prosecutor in Paris, has ordered Tristane Banone, 32-year-old journalist, and Dominique Strauss-Kahn to face each other in court, after hearing each in preliminary interviews. DSK, as he is popularly known, resigned as head of the International Monetary Fund while arrested in New York on charges (later dropped) of raping a hotel maid, earlier this year.

Banone has accused him of trying to rape her in 2003, in a case that continues to grip French media, in part because of DSK’s political ambitions.

Each is accusing the other of lying and DSK is bringing charges of defamation against Banone.

The court has not set a date for the two to meet before a judge.

NEUCHATEL, SWITZERLAND – Siwss unemployment figures for August show no change in the rate, at 2.8 percent. The 2,487 additional people out of work correspond roughly to the number of new young people (ages 15-24) out of work, a seasonal factor as recent graduates come onto the job market.

The overall jobless rate is down by 21.8 percent compared to a year earlier, but UBS in a revised forecast for the Swiss economy 7 September said it expects to see unemployment rise to 3 percent and stabilize there in coming months.

Swiss franc pegged to euro: central bank hopes it will be less attractive today

ZURICH, SWITZERLAND – The Swiss National Bank (SNB) Tuesday late morning announced it is fixing the Swiss franc to the euro at a rate that will not be allowed to slip below euro 1.20 and says it is “prepared to buy foreign currency in unlimited quantities”.

Its action was accompanied by the toughest words to date on what it referred to as the “current massive overvaluation of the Swiss franc”, saying this “poses an acute threat to the Swiss economy and carries the risk of a deflationary development.” Reuters remarked that it had used “some of the strongest language from a central bank in the modern era”.

The SNB says it is “aiming for a substantial and sustained weakening of the Swiss franc. With immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF1.20.”

The SNB statement notes that “even at a rate of CHF 1.20 per euro, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflationary risks so require, the SNB will take further measures.”

The euro had lost more than 13 percent against the Swiss franc since the start of 2011 before the SNB’s decision. Bloomberg reports that later in the day “The franc snapped four days of gains versus the euro, dropping as much as 8.7 percent. It traded at 1.2025 at 3:42 pm in Zurich and was at 85.49 centimes versus the dollar.”

Reuters currency converter

ZURICH, SWITZERLAND – The Swiss National Bank’s (SNB) half-year report issued Friday is hardly cheering news at the start of a long national holiday weekend, with an interim consolidated loss of CHF10.8 billion francs thanks to the strength of the Swiss franc against major currencies, before allocation to reserves. “The SNB result depends largely on developments in the gold, foreign exchange and capital markets. Consequently, strong fluctuations are normal, and only provisional conclusions are possible as regards the annual result,” the central bank says in a statement.

The SNB in 2010 showed a loss of CHF19.17b in 2010 and a profit of CHF9.96b in 2009.

Foreign currency position losses were some CHF9.9 billion, January to June, due mainly to exchange rate-related valuation losses of around
CHF 11.7 billion. The US dollar depreciated by 9.6 percent, the yen by 8.9 percent and the euro by 2.4 percent, according to the bank, and while there were some currency gains, they were not enough to offset these losses.

The gold price per kg at mid-year was about CHF40,800, resulting in a valuation loss of CHF 1.6 billion. The SNB’s gold holdings were unchanged, but they suffered a valuation loss of CHF1.6 billion: “Although the dollar price per fine ounce rose compared to the end-year
value, the price per kilogram fell from CHF42,289 to CHF40,799 as a result of the weaker USD exchange rate,” the SNB notes.

UBS stabilization fund reduced

The SNB loan to the stabilization fund that was created in late 2008 to bail out the country’s largest bank, UBS, was reduced from CHF11.8b
($12.6b) to CHF8.0 billion ($9.4b), during the first six months. “The total risk decreased from almost CHF14b to around CHF10b, the SNB reports, with the fund showing a half-yearly profit of $1.334b, representing a contribution of CHF 697 million to the consolidated result.”

Reserves to be allocated at the end of the year

Switzerland’s reserves are 25 percent in dollars, 55 percent in euros, 3 percent in GB sterling, 10 percent in the Japanese yen, 4 percent in Canadian dollars, with 3 percent “other”. By law, the SNB must set aside provisions to “maintain the currency reserves at the level necessary
for monetary policy”; the allocation will be made towards the end of the year.

GENEVA, SWITZERLAND – Gloomy news about sovereign debts, new bank capital requirements and the US debt ceiling were briefly forgotten on world stock markets Wednesday 20 July, with strong results from several tech companies. Apple lead the way with a 125 percent increase in net income for the second quarter, compared to a year earlier. IBM also had results well above predictions. The stronger than expected corporate results plus news from the White House that a debt ceiling deal may be coming prompted markets to rally. Apple’s shares rose 4.5 percent in trading Tuesday, with the income jump attributed to Asian markets and iPhone sales.

Links to other sites: Financial Times, Reuters

Swiss franc reaches record highs against euro, dollar

ZURICH, SWITZERLAND – The Swiss franc was being exchanged in Asia for $.81 and €1.14 shortly before midnight, TSR reports. Thursday’s exchange rates as listed by Reuters showed the franc trading at $.81 and €1.16 at 14:00 Swiss time Thursday.

The Swiss currency was trading at new highs against the dollar and the euro, as concerns grow over the US debt ceiling, rising debt costs for Italy and the downgrading of Irish sovereign debt.

Current exchage rates on Reuters

Ikea (here: Geneva) is one of Switzerland's many international companies

BERN, SWITZERLAND – The Swiss federal government’s tool for companies to check if their remuneration programmes respect the law on equal pay is now available in English, Bern announced Tuesday 28 June.

Logib, which was downloaded 3,700 times in 2010, was difficult for international companies, Swiss-based or foreign, to use because there was no English version.

“Logib makes it easy for companies to establish to what extent they respect an equal pay policy. They can then decide if they need to carry out a more thorough analysis with the help of experts,” the Federal Department of Home Affairs says in a statement.

It notes that other countries have expressed interest in the tool, and it has been adopted by Germany and Luxembourg.

Switzerland is a party to several international agreements on equal pay for equal work for men and women; companies are also required to make a public statement that they respect the principle of equal pay.

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Source: US State Department (click on image to view larger)

BERN, SWITZERLAND – Switzerland in 2010 retained its poor “tier 2″ ranking in the annual US Trafficking in Persons Report 2011, one of the most broad-ranging global studies of the extent of the problem.

Tier 1 countries comply fully with the US Trafficking Victims Protection Act, while tier 2 countries are defined as those “whose governments do not fully comply with the TVPA’s minimum standards, but are making significant efforts to bring themselves into compliance with those standards”.

Tier 2 watch countries and Tier 3 countries, those not in compliance, risk being penalized by the US.

Estimates for the number of people trafficked are notoriously unreliable but tend to hover around 30 million globally. The US Department of State, which publishes the annual trafficking report this year added 7 countries, bringing the total reviewed to 184. It lists as the main categories: forced labour, sex trafficking, bonded labour, debt bondage among migrant workers, involuntary domestic servitude, forced child labour,  child soldiers and child sex trafficking.

The UN Global Compact in 2008 issued a report noting that 2.1 million people are in forced labour, but for even the mostly closely involved NGO’s (non-governmental organizations) note that a key problem for all areas of trafficking is that the people registered and reflected in statistics under-represent the extent of the problem.

A February 2011 report issued by the Geneva-based IOM (International Organization for Migration) reported that re-trafficking complicates efforts to arrive at valid estimates.

Switzerland should prohibit all prostitution under age 18, report suggests

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Geneva, marked by much coming (growth) despite the going (exodus): companies, individuals

GENEVA, SWITZERLAND – Geneva comes out looking pretty but at a price, in the latest “location quality” comparison drawn up by bank Credit Suisse for Swiss cantons. The report issued 22 June says Geneva’s growing economic success is thanks in particular to the availability of high quality labour and its easy accessibility. Geneva’s growth rate from 1995-2008 was the strongest in French-speaking Switzerland.

Victim of its success leads to greater regional cooperation

The canton is nevertheless a victim of its own success, the report notes, with companies and individuals moving to neighboring canton Vaud and across the border to France. A growing regional cooperation is developing as a result, the report notes.

Geneva is one of the country’s smallest cantons, at 282 square kilometres but it is ranked fourth for dynamic economic performance by the bank after Zurich, Zug and Aargau, wth the last two benefitting from their proximity to Zurich.

Geneva’s strength comes from its mixed role as a home to international organizations and as Switzerland’s second international financial centre plus main centre for private wealth management, but it has also been growing rapidly as a trading centre for raw materials. It is gradually going through a transformation from cutting edge industries to cutting edge value-added business, which means that measuring by the value created per employee is one of the country’s highest.

Disposable income in Geneva is by far the lowest in Switzerland

The downside is that Geneva has the tax rates, corporate and personal, that are among Switzerland’s highest, with some of the most costly housing in the country. As a result, Geneva’s regional disposable income, or RDI, used to calculate the financial attractiveness of cantons for residence, is by far the lowest in Switzerland.

Credit Suisse points to the exodus towards France and neighbouring towns, notably Nyon, Rolle and Morges, as the direct result of these high costs, both for companies and individuals.

Lausanne at dusk, viewed from Lake Geneva: growing number of foreigners live in the city, its suburbs

GENEVA, SWITZERLAND – Geneva, with its international organizations and United Nations European seat is not likely to lose its reputation as Switzerland’s international city, but Lausanne has been creeping up on it as an international centre. From 2008 to 2010 the resident foreigners’ share of the total population in the capital of Vaud was higher than that in Geneva, and growing faster.

Figures published Monday 30 May by Badac, the Swiss cantons and cities database, show that Lausanne has had a larger percentage of foreigners than Geneva in recent years, although the two are close: Lausanne’s population in 2010 was 39.24 percent foreigners while Geneva’s was 38.58 percent, but while the increase in the foreign population in Geneva was .95 percent, Lausanne’s was 1.22 percent.

The figures take into account only the cities themselves, not their larger urban areas. Geneva’s population in 2010 was 185,958 and Lausanne’s was 125,885.

Smaller cities in the Lake Geneva region, such as some suburbs of Lausanne and Geneva, have even higher percentages of foreigners, including some of the highest rates in Switzerland: Montreux, 44.33 percent foreigners, Meyrin 33.99, Carouge 36.97, Renens 50.85, Nyon 36.39, Vevey 43.38, Morges 33.17, Versoix 33.20, Grand-Saconnex 28.40, Ecublens 43.03, Chêne-Bougeries 29.68.

Spreitenbach (50.74 percent), northwest of Zurich, and Renens (50.85), west of Lausanne, have a majority of foreigners; they are the only two Swiss cities over 10,000 where resident foreigners make up more than 50 percent of the population.

Electric car at the Grimsel Pass in Switzerland, with

Geneva, Switzerland (GenevaLunch) – The German government has confirmed it will subsidize its budding green car industry with up to euros 1 million for electric cars, in order to have one million of them on the road by 2020. Angela Merkel made the announcement Saturday in her weekly newscast.

Welt am Sonntag newspaper says Germany is also considering boosting sales by encouraging consumers through tax cuts and special parking areas that would be free for electric cars, among other measures.

The amount is smaller than the estimate mentioned a month ago by puregreencars, which says industry analysts expect the green car measures to create up to 30,000 jobs, noting that the government plans to buy electric cars for its ministries.

But Spiegel magagzine in late April wrote that the government appeared to be setting off on the wrong carbon foot, with electric cars often having a worse carbon footprint than others.

AlpIQ, the Swiss Alpine energy company, which backs several electric car projects, predicts that 15 percent of the Swiss car fleet will be electric by 2020. The Alpmobil resort cars project during the summer of 2010 near the Grimsel and Furka passes saw a fleet of 60 electric cars made available to tourists, for silent, pollution-free touring.

©2011 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.