Worried Italians bring wealth to Switzerland

More and more Italians are parking part of their wealth in Switzerland, because they are concerned about political stability and the survival of the euro. Despite promises from the Italian government that they will not leave the euro and will not increase the tax on wealth, Italians with savings are more likely to move abroad, according to reports Reuters.

Swiss banks are noticing that more Italians are coming by to open a bank account in Swiss francs or to inquire about alternatives to the euro and Italian government bonds. High-net-worth individuals from the north of Italy see a Swiss franc bank account as a safe alternative to a savings account with euros in an Italian bank. There are also no practical barriers to parking assets in Switzerland, as Italians can transfer their bank balances digitally from one country to another.

Savings to Switzerland

Figures from the Bank for International Settlements (BIS) show that Swiss banks generated 5% more revenue from Italian customers from the third quarter of last year to the second quarter of this year. And that was before the new Italian government was installed. It is therefore likely that there will be another increase in the third quarter.

A Swiss banker told Reuters that when there is political uncertainty in Italy, there is always a flight of wealth to Switzerland. That's because the Italian government introduced a one-time tax on savings in the 1992 currency crisis. Savers who have little confidence in the government will be more likely to move their assets abroad with this knowledge.

Budgetary problems in Italy

The Italian government has been at loggerheads with the European Commission for some time over its budget for next year. The European Commission has rejected the budget proposal because the projected deficit of 2.4% is not in line with the common objective of reducing public debt. The Italian government must reduce the deficit in order not to risk a fine. This means that tax increases still cannot be ruled out.

The big difference with the situation in 1992 is that Italy no longer has its own currency and therefore does not have the possibility of devaluing. Also, savings in Italy are guaranteed up to €100,000 per person per bank, which means that Italian savers are much less at risk today than they were then. Despite these certainties, some savers seek safety in a Swiss bank account.

This contribution was made from Geotrendlines