Up until recently, Credit Suisse was considered the cornerstone of the Swiss economy, an iconic institution that paved the way for a nation’s progress. That said, it should not have been a surprise that the Swiss were up in arms earlier this year when the iconic bank announced its bankruptcy. Since the dissolution of Swissair, the country’s flag carrier, back in 2002, any cataclysmic events involving national institutions was bound to shake Switzerland as it was bound to adversely affect the national economy. The collapse of Credit Suisse was no exception.
But anyone who has been to Switzerland recently may have noticed the insouciance with which its people are dealing with the crisis. Indeed, despite the bank’s fall, the country’s unemployment rate appears unaffected and its annual inflation rate remains at an enviable 1.6%. Likewise, the value of the Swiss franc has grown exponentially since the UBS takeover occurred in March.
Could Swiss Indifference Lead to Further Economic Stagnation?
The Swiss are famous – or, more accurately, infamous – for shrugging off major issues, especially if they don’t expect these to have any significant impact on their economy or their way of life. It is this seeming indifference that has caused critics, in and out of the country, to wonder if Switzerland has any plans to rethink its now-tarnished reputation in the global investment and financial communities.
While some of the country’s elite politicians laud the “salvation” of Credit Suisse via UBS, more forward-thinking leaders want to use it as a catalyst for economic reform in the country – something which many feel is long overdue.
To say that the Credit Suisse collapse is fueling this demand for reform is to see only a small part of the story. Those in favor of economic reform have been clamoring for it for more than a decade, but it is only in recent years that the clamor has grown louder thanks to the way the US Department of Justice has called out Swiss leaders for aiding and abetting Americans seeking to avoid paying their taxes, and how the Swiss government was slow to give up its neutrality when Russia invaded Ukraine last year.
Many people wonder if the issue will remain a relevant one in the political arena as the country is set to hit the polls come October 22nd, but that remains to be seen.