Explained: Why Swiss banks are so often in the news

Switzerland is home to delicious chocolate and cheese, picture-postcard valleys, a really cool army knife, and Roger Federer. It also happens to be world's largest centre for offshore wealth.

Switzerland is home to delicious chocolate and cheese, picture-postcard valleys, a really cool army knife, and Roger Federer. It also happens to be world's largest centre for offshore wealth.

Yesterday, it emerged that Indian funds in Swiss banks skyrocketed (by more than 50 per cent) in 2017, bucking a downward trend. If you want to know what the government and the Opposition think of that, you can read this. But here, we're concerned about a larger, more pressing question: Why are Switzerland's banks so often in the news? Why do they attract foreign funds?

The Tax Justice Network, an international advocacy group, ranked Switzerland number one in a financial secrecy index published this year (just above the US and the Cayman Islands), and calls it "the grandfather of the world's tax havens".

The report identifies three key factors that shape Switzerland's banking system: an "infamous tradition of banking secrecy", "political stability", and "a 'financial consensus' strongly rooted in Swiss society which has generally protected the offshore financial services centre against major political challenges".

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