Did you know ?

When was the Swiss banking secrecy formalized?

Banking confidentiality was formalized in article 47 of the Federal Act on Banks and Savings Banks which came into effect on November 8th 1934 and which was to codify a long-standing practice. Until this date, as far as banking was concerned, Switzerland had no federal legislation and consequently no codified rule concerning banking confidentiality. But for centuries a special relationship built on confidence had prevailed between the banks and their clients based on an unwritten law, comparable to the privileged relationship between a lawyer and his client. The formalization of banking confidentiality in an article of law was consequently the result of a long-standing tradition.  Even if the 1934 Act talks of banking confidentiality, it should be pointed out that this duty to discretion is not aimed at protecting the bank but the client. In this respect, the term 'banker's duty of confidentiality' is more appropriate than 'banking secrecy'.

When was the term "private banker" registered as a trademark?

In Switzerland, the term "private banker" corresponds to a strict definition referred to in the Federal Banking Act; they are banks with a specific legal structure: sole ownership, general partnership, limited partnership or limited partnership with shares. The special status attributed to private bankers is justified by the presence among them of one or several partners with unlimited liability for the bank's commitments.
 
This term is often confused with the broader one of "private bank", frequently used today in current speech to define banks – generally incorporated as limited companies – whose main activity is asset management, also referred to as "private banking".
 
In 1997, in order to avoid the widespread and abusive use of the term "private banker" by persons or establishments not fulfilling the legal requirements, the Swiss Private Bankers Association (SPBA) registered the collective trademark "private banker" (singular and plural in different languages) with the Swiss Federal Institute of Intellectual Property.
 
Since then, the SPBA holds the exclusive right to this name and only its members or other banks meeting the same legal criteria are authorized to use it in Switzerland.

How far back do the private bankers go?

The private bankers represent the oldest form of banking institution in the Swiss financial centre. The reformation in the 16th century and the emergence of Calvinism brought persecuted Protestants flocking from all over Europe - but mainly from France and Italy - to seek refuge in Geneva. Among them were a number of bankers who wasted no time in displaying their talents here. In the 18th century Jacques Necker, a private banker from Geneva, rose to fame when he was appointed director general of finance by King Louis XVI of France. To this day, many private bankers can trace their origins back to the 18th century. At that time they were universal bankers, catering to their clients' credit requirements. Up until the beginning of the industrial era, the private bankers were the most important and most influential actors in the banking system as a whole.