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 ()

No 2016-05, Working Papers from Swiss National Bank

Abstract: The US financial crisis and the later eurozone crisis have substantially impacted 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 substantial retrenchment into the domestic market by Swiss banks. By contrast, 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 Swiss banking statistics which allow us to differentiate the situation across different banks and currencies. We show that, during the US financial crisis, the bank flows cycle 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 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 Swiss franc was driven by both foreign and domestic customers from 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)
New Economics Papers: this item is included in nep-acc, nep-ban, nep-eec, nep-mac, nep-opm and nep-pke
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.snb.ch/n/mmr/reference/working_paper_2 ... _paper_2016_05.n.pdf (application/pdf)

Related works:
Journal Article: 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:snb:snbwpa:2016-05

Access Statistics for this paper

More papers in Working Papers from Swiss National Bank Contact information at EDIRC.
Bibliographic data for series maintained by Enzo Rossi ().

 
Page updated 2019-06-25
Handle: RePEc:snb:snbwpa:2016-05