Zurich Gnomes on the run
October 23, 2013
By Stefan Leins
The US government is accusing Raoul Weil, head of UBS’ wealth management from 2002 to 2007, of helping thousands of American clients to hide a total amount of 20 billion US dollars of untaxed money in Switzerland. Last week, Italian police arrested him in Bologna.
Weil’s case may be the most significant, but it’s not the first of its kind. Since Obama entered office, a number of Swiss bankers have been on the radar for assisting tax fraud. And among Swiss bankers, many now avoid travelling to the United States, fearing that they could be caught and put on trial for similar reasons.
Raoul Weil’s arrest offers a nice opportunity to reflect upon a remarkable transformation in the image of Swiss bankers during the last decades. Until the 1960s, Swiss banquiers were perceived as uncharismatic, secretive and mousy people. They looked more like accountants than consultants, and had all the charm of Harry Potter’s wealth-hoarding goblins.
This description lost its validity in 1964, when British Labour politician George Brown coined the expression “Gnomes of Zurich” to discredit Swiss bankers’ aggressive speculation against the British Pound. Suddenly, Swiss bankers were not only secretive and uncharismatic, they were also aggressive and greedy. This new role was quickly embodied and performed by some of the bankers themselves. As historian Chris Bowlby mentions, at that time, some Swiss bankers answered phone calls from Britain by saying “Hello, gnome speaking” (BBC online 2010).
In the 1990s, Swiss Banking went through a structural shift. The largest Swiss banks, which were traditionally successful in private banking, began to massively expand their investment banking activities. Swiss banks became investment banking houses, comparable to Goldman Sachs or Morgan Stanley. This new orientation was driven by a number of Swiss key personalities that learned about investment banking on Wall Street and in London.
For this new investment banking-oriented Swiss Banking, the accountant-like banquier – which was still an aspect of the Gnome personality – wasn’t of practical use anymore. A new type of Swiss banker – outgoing, narcissistic, risk-taking – appeared to represent a more successful model to achieve the financial gains Swiss banks were so desperately looking for. Or to put it simple: Gordon Gekko arrived in Switzerland.
In 2007 and 2008, UBS was heavily affected by the subprime crisis (most likely a direct outcome of the merger between Gekko and the Gnome). After a government bailout of sixty billion US dollars, the image of the Swiss banker as an outgoing, greedy risk-taker came under fire. Subsequently, a return to the goblin-like banquiers seemed expectable. However, this was before the US government recognized the potential of untaxed money on Swiss bank accounts. Ever since, Swiss Bankers are increasingly framed as a secretive but greedy group of persons that hides money beyond the control of states.
In addition to the banquier, this new image of the Swiss banker as the Gnome and the Gekko, seems to put emphasis on hiding money and escaping governmental control. Now, the question is: How will this recent transformation influence the framing and self-ascription of Swiss bankers in the long run? Will they become the “Swiss Scrats” (fans of Ice Age, the movie, will know what I’m referring to) or the “Gnomes of Zurich on the run”?
Stefan Leins is a PhD student at the Department of Social Anthropology at the University of Zurich. He has done two years of fieldwork among the gnomes, ahem, the scrats of Zurich.