EconPapers    
Economics at your fingertips  
 

The banking sector and the Swiss financial account during the financial and European debt crises

Raphael Auer and Cédric Tille ()

Aussenwirtschaft, 2016, vol. 67, issue 02, 69-97

Abstract: The US financial crisis and the later Eurozone crisis have substantially affected capital flows into and out of financial centers like Switzerland. We focus on the pattern of capital flows involving the Swiss banking industry. We first rely on balance-of-payment statistics and show that net banking inflows rose during the acute phases of the crises, albeit with a contrasting pattern. In the wake of the collapse of Lehman Brothers, net inflows were driven by a large retrenchment towards the domestic market by Swiss banks. By contrast, the net inflows from mid-2011 to mid-2012 were driven by large flows into Switzerland by foreign banks. We then use more detailed data from the Swiss banking statistics which allow us to contrast the situation across different banks and currencies. We show that the cycle during the US crisis in bank flows was driven strongly by exposures in US dollars, and to a large extent by Swiss-owned banks. During the Eurozone crisis by contrast, the flight to the Swiss franc and the move away from the Euro was also driven by banks that are located in Switzerland, yet are foreign-owned. In addition, while the demand for the franc was driven by both foreign and domestic customers during mid-2011 to early 2013, domestic demand took a prominent role thereafter.

Keywords: Capital flows; Safe haven; Switzerland; Financial globalization; International banking (search for similar items in EconPapers)
JEL-codes: E51 G15 G21 F21 F32 F36 F65 (search for similar items in EconPapers)
Date: 2016-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
http://ux-tauri.unisg.ch/RePEc/usg/auswrt/AW_67-02__06_Auer-Tille.pdf (application/pdf)

Related works:
Working Paper: The banking sector and the Swiss financial account during the financial and European debt crises (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:usg:auswrt:2016:67:02:69-97

Access Statistics for this article

More articles in Aussenwirtschaft from University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research Contact information at EDIRC.
Bibliographic data for series maintained by Stefan Legge ().

 
Page updated 2020-07-05
Handle: RePEc:usg:auswrt:2016:67:02:69-97