Wednesday Night #820

The November 19th Salon was devoted almost exclusively to Swiss banking. In addition to long time Wednesday night favourite Udo Stundner, two special invited guests from Credit Suisse Private Banking Canada graced the Nicholson table. Clive W. Robinson and his colleague, David Wajs patiently explained the relationship and differences between retail banking in Canada and Switzerland Although neither was directly involved in the Swiss operation, both graciously answered questions from both David and the invited guests ranging from barbed questions relating to the identification of holocaust survivors and their descendants, to the very special privileged relationship that has existed between Swiss banks and their clients. By the end of the evening a bond had been formed thanks to the patient and forthright exposé. Warm handshakes were exchanged attesting to satisfaction with the newly forged friendship.

The august Credit Suisse Private Banking group were almost immediately introduced to one of David Nicholson's favourite tactics, namely confrontation relating to a recent news item - the actions of the Swiss banks during World War II and the perceived delay in identifying the rightful owners (or their heirs) of assets deposited in Switzerland during World War II. Nicholson's questions provoked replies partly emanating from the bankers, partly from holocaust survivors, most supporting the bankers' actions.

In Canada, after an established period of time, unclaimed bank balances are deposited with the Bank of Canada who is then responsible for paying them out once substantiated proof of ownership is furnished. In Switzerland the unclaimed balances remain with the bank until claimed by the owner or designated representative or heir. This is due to the special privileged relationship established between the banker and the client in Switzerland. Assets are maintained in segregated accounts and are invested according to the specific instructions of the depositor at the time of deposit, unless changed by the same depositor. This arrangement continues indefinitely.

During World War II, those Europeans who were able to do so, not knowing the outcome of the war, arranged for their assets to be deposited in Swiss banks, to be picked up at the end of hostilities. Nobody foresaw the terrible toll of human life that complicated the reclamation of these deposits.

Complicating the picture, Switzerland's geography placed it in a position of extreme vulnerability and rather than being unduly criticized for actions and non-actions of a neutral state, deserves credit for the degree of neutrality it achieved. In some instances, Swiss assets had been confiscated by some European countries, and Switzerland confiscated the assets of their nationals in exchange.

Recent attempts to identify and return assets deposited by holocaust victims and their descendants have required heroic efforts and still continue. Swiss banking has undergone changes and continues to evolve.

Thursday, July 2, 1998 New York, California take on Swiss banks Sanctions support Holocaust heirs By Brian Milner NEW YORK -- U.S. states and cities with global financial clout will impose tough sanctions on the largest Swiss banks after the breakdown of negotiations to settle compensation claims stemming from Holocaust losses. The decision, reached yesterday in New York by a group of senior finance officials who have been monitoring the talks, could cost the Swiss banks millions of dollars in lost fees and investments.

Swiss banks in Canada are retail banks operating under Canadian legislation. They bring to their Canadian customers only the prestige and power of the world group. They are well placed to provide diversity to increasingly sophisticated clients. .

Bob Stewart's Guest: Linda Leith, editor , essayist and novelist (Birds of Passage, The Tragedy Queen) is currently starting up a new Canadian magazine of arts and ideas, Blue Metropolis, which she hopes will be launched in Montréal in the Spring of 1998.

Amalgamation: There seems to be a compulsive trend towards amalgamation of municipalities in North America although there is no indication that this provides any advantage to the citizens. Bob Stewart pointed out that railways operate much more cost-effectively when split and downsized.

The Economy: The Canadian dollar remains very undervalued. The talk of deflation is not to be taken seriously. Deflation is tied into a decrease in the money supply. In Canada, the money supply has been growing at a rate of close to fifteen percent. This is a leading indicator of continuing growth through 1997-98.

Ted Fisher, Chairman of Estate & Benefit Co-ordinators, gave a very cogent explanation of the Reverse Mortgage concept, which could benefit a certain number of senior and/or retired members of the community and their families. While this is not a plan that is readily available in Canada, it has been widely accepted in the U.S. and may well become more popular here in view of the continuing problems of the over-taxed middle class and the fluctuations of the real estate markets.

We will have to wait for more stable conditions before interest rates are raised, 1/4% at a time.
The Stock Market: The only danger is if investors who are now buying into the dips decide to sell at the peaks. This could happen.

• "Morality evolves. Retroactive morality is very dangerous."
• "Winston Churchill to-day, could be taken to trial for many of his decisions of the day, but was considered a hero at the time."
• "The Canadian Government was no better (than any other) in its treatment of German and Japanese nationals and their descendants."
• "Deflation is a word sometimes found in a dictionary."
• "There are changes taking place on the Swiss scene, and they are meeting those challenges.