Switzerland: Still resilient and reliable?
13 May 2024

Switzerland: Still resilient and reliable?

Like the country in which they operate, Swiss law firms seem immune to adversity beyond their borders. So, how do they do they manage it?

Notwithstanding last year’s dramatic collapse of Credit Suisse, Swiss banking maintains a strong reputation for safety and security in the management of money. This was underpinned in March 2024 when the Swiss National Bank (SNB) announced a surprise cut to its benchmark interest rate – by 25 basis points to 1.5 per cent. As the first central bank of a major western industrialised country to make such a move in the current cycle, it was heralded as a sign of policymakers’ confidence in the low rate of Swiss inflation – currently just 1.2 per cent – being sustained. But more than that, it was arguably a wider vote of confidence in the stability of the Swiss economy – as confirmed by Thomas Jordan, the SNB chair, who said: “The easing of monetary policy has been made possible because the fight against inflation over the past two-and-a-half years has been effective. For some months now, inflation has been back below 2 per cent and thus in the range the SNB equates with price stability.”

Notably, the SNB move stands in stark contrast with the European Central Bank which has declined to commit to future rate cuts amid warnings that relatively high inflation in the Eurozone will persist throughout this year. The US Federal Reserve has also held rates steady, indicating only that cuts would be fewer in number and potentially less significant than had been anticipated at the start of this year. Looking ahead, this affirmation of the SNB’s successful monetary policy can only be good news for Swiss law firms and their clients.

 

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