Ethics and governance in the European Financial centers

The SFBC Circular 05/3 "Audit firms" has been adapted to the new legislation on collective investment schemes with effect on September 1, 2007. Particularly, the Circular regulates the conditions for eased recognition as lead auditors for asset managers of collective investment schemes and representatives of foreign collective investment schemes.

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The SFBC (Swiss Federal Banking Commission) published recently its latest annual report.

The report underlines that in 2006, there were a number of widely publicised cases where attempts were made to test the ethical borders and that debate on this topic is entirely desirable: it reflects the sensitivity of the issue, encourages the necessary awareness and documents the extent of the potential loss of reputation – irrespective of any breach of supervisory or indeed criminal law. The Banking
Commission is monitoring this development closely. Ultimately, the Commission grants licences only to those who enjoy a good reputation and guarantee proper conduct of their business activities.
Those who overreach the borders of ethical conduct undermine trust in the financial centre. Yet trust is the greatest asset it has to offer. A climate of trust that has taken a long time to establish can be destroyed in an instant. It is based on personal integrity and expert solutions; and supervisory authorities also have a role to play.

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See full report in French
See full report in German

Pierre Darier, who is the chairperson of the Bankers association in Switzerland, did not recognise the FATF's authority in a recent speech.
Switzerland has already introduced rules to combat money laundering and terror financing, but the bankers called even stricter proposals by the Financial Action Task Force (FATF) uneconomical.

Pierre Darier criticised a plan to make any market abuse such as insider dealing or price manipulation a crime rather than just an offence, saying not everything that went wrong in markets was because of criminal intentions.

See speech (in French)