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Financial Sustainability: Too Big To Fail?
Like the United States, Switzerland was faced with a difficult situation during the recent financial crisis: either accept the devastating consequences of big bank failure or take stabilization measures. The stabilization measures that Swiss authorities ended up taking proved effective, but also exposed the problems associated with large banks that are "systemically relevant"— that is, banks whose failure would compromise the entire economic system of the country. The Swiss National Bank (SNB) bore the lion's share of the stabilization measures and has since then been a staunch advocate of remedying the "Too-Big-To-Fail" problem. It participated actively in an expert commission established by the Swiss government to examine this problem.
The interim findings of this commission were released in April 2010 and propose measures that are both preventative (reducing the likelihood of failure) and that minimize the cost to the economy if a failure were to occur. The aim is to remove the need for state intervention.
These measures include additional and progressive capital requirements for systemically relevant banks. The goal is to increase the ability of banks to absorb losses and to create incentives for the banks to reduce their systemic relevance. The measures also call for banks to demonstrate that they can maintain functions that are critical for the economy in case of bank insolvency. If not, the authorities would impose restrictions on the organization and structure of the bank.
We believe that this report and the draft legislation are important steps forward in the Swiss authorities' efforts to address the Too-Big-To-Fail problem. Switzerland will also contribute to the international initiatives and work toward global cooperation on this problem. The problem is simply too big to fail.
Philipp Hildebrand, Ph.D.
Chairman of the Governing Board
Swiss National Bank
Visit Gallatin250: Embassy of Switzerland events on fiscal responsibility
Swiss President Promotes Clean Tech in the U.S.
Only one week before the Deepwater Horizon oil spill in the Gulf of Mexico, Swiss and U.S. leaders were meeting to discuss the environmental and economic advantages of moving toward clean technology. "Countries that embrace a long-term policy toward clean technology will be the winner in the future market," said Swiss President Doris Leuthard as she addressed a Capitol Hill briefing on April 12. Her sentiment was echoed by Matt Rogers, Senior Advisor in the U.S. Department of Energy and Congressman Russ Carnahan (D-Missouri), showing that both nations see clean technology as a means toward economic growth and environmental sustainability. Leuthard's statements were captured in an exclusive video interview, and her participation in the event was covered by various media outlets, including in the popular Swiss magazine Schweizer Illustrierte. The event was cosponsored by ThinkSwiss and the Embassy of Switzerland, together with American partners.
Training for the World Cup
Training for the 2010 Soccer World Cup has taken on a whole new meaning for some South Africans. Instead of running and passing, these trainees are learning the ins and outs of the tourism industry, thanks to the Swiss-South African Cooperation Initiative. This Swiss aid organization has been providing skilled-labor training to South Africans for 10 years to alleviate the country's high unemployment. With the World Cup taking place in South Africa in June and July—and the expected boom to the nation's tourism—the organization saw a perfect opportunity to offer a 16-week training course in the hospitality sector, something for which Switzerland is well known. Graduates have been finding jobs in hotels and restaurants, which are glad for the skilled help. The SSACI is a public-private enterprise sponsored jointly by the Swiss Agency for Development and Cooperation (SDC) and about 15 mostly Swiss companies.
Swiss Law Pioneers Return of Dictator Funds
Known worldwide for their excellent service and reliability, Swiss banks have also been used in the past as a repository for illicit dictator funds. To rectify this situation, Switzerland has pioneered new legislation that complements existing legislation and makes it easier to return these funds to the home country for programs that benefit the people. Over the past 15 years, Switzerland has returned about $1.6 billion deposited in Swiss banks by "politically exposed persons," making it number one in the restitution of funds globally. Tightening legislation against money laundering in past years has also decreased incidents. The new legislation now makes it possible to confiscate assets even if the home country does not or cannot institute criminal proceedings. The onus will lie with the depositor to prove the legal origin of the funds rather than the plaintiff to prove they were stolen. Switzerland is the first country to propose such stringent legislation.
Building Dialogue between Swiss and U.S. Legislators
As "Sister Republics" and close allies on many global issues, it is natural that Swiss and U.S. legislators seek opportunities for dialogue. The Friends of Switzerland Caucus was formed in 2003 in the U.S. House of Representatives for this purpose. Beginning with 29 members from both political parties, the Caucus has grown over the years to 41, adding its three newest members this spring: Congresswoman Betsy Markey (D-Colorado), Congressman Michael McMahon (D-New York) and Congressman Larry Kissell (D-North Carolina). The Caucus is co- chaired by Congresswoman Tammy Baldwin (D-Wisconsin) and Congressman Wally Herger (R-California). It works closely with its counterpart in Switzerland, the Parliamentary Association Switzerland-U.S.A., which boasts a diverse membership of Swiss legislators from both houses of parliament and all political parties committed to Swiss-U.S. dialogue.
The Secret Life of Pollen
If you have been one of millions of people sneezing and sniffling and suffering from hay fever over the past months, you might not think pollen is such a beautiful thing. But Swiss scientific photographer Martin Oeggerli may convince you otherwise. Oeggerli calls himself a "micronaut" because he explores the world of the small, using an electron scanning microscope to capture images that are barely visible to the natural eye. His pollen photos reveal not only their amazing designs and colors, but also details about their life. "He explores the natural world at the intersection of science and art," says Todd James, Senior Photo Editor of National Geographic Magazine, who recently devoted an entire article and photo gallery to Oeggeli's beautiful and detailed photographs of pollen. See more of Oeggerli's work on his website. (Photo of Forget-me-not pollen © Micronaut 2008, kindly supported by FHNW School of Life Sciences)
Get Your Festival On!
Summer season is festival season in Switzerland, where visitors and residents alike enjoy a wide range of outdoor arts and music festivals—many of them in unique and beautiful locations. There is something for everybody's musical taste: Jazz aficionados will want to head to the renowned Montreux Jazz Festival, held each year in July on the northern shores of Lake Geneva and featuring a program of famous and emerging jazz artists from around the world. The Lucerne Festival, featuring music around the theme Eros this year, will be popular for Classical music fans. The American Friends of the Lucerne Festival even arranges a special tour to this event. For a unique setting, try the Opera Festival at Avenches, former Roman capital of Switzerland. The festival pairs spectacular opera with classical architecture, staging the performances in the ruins of the town"s Roman amphitheatre.
How to Draw Your Dragon
If you enjoyed DreamWorks Animation's latest offering this spring, How to Train Your Dragon, you can credit Swiss-born and trained Simon Otto, who served as supervising animator on the feature film. Trained at the Zurich University of the Arts, Otto began working for DreamWorks in Los Angeles after completing his studies. DreamWorks is known for pushing the envelope of animation technology and artistry, and Otto is no stranger to these challenges: Creating the miniscule movements of the mythical dragons required Otto and his team of 50 animators to work 70-80 weeks, 12-18 hours a day. They relied on nature—studying the movements of owls, cats and other animals—for inspiration in bringing these mythical animals to life, as Otto explains in this video interview.
Swiss Passports Go Biometric
On March 1, Swiss passports entered the digital age as Switzerland launched its new biometric passport. This passport has an embedded microchip on which biometric data, consisting of one digital facial photograph, a digital signature, and two digital fingerprints, is stored. This new feature will prohibit lost or stolen Swiss passports from being fraudulently used. For Swiss travelers to the United States, this new passport has the additional benefit of not requiring a visa to enter the U.S. under the Visa Waiver Program. To apply for one, please visit the Swiss Embassy website or contact the Swiss representation where you are registered. Please note that your machine-readable passport (Passport 03 or 06) issued prior to March 1, 2010, will remain valid until its expiration date.