Falklands crisis good for the Swiss banks

Press, 3 June 1982, Page 16

Falklands crisis good for the Swiss banks

By

NORRIS WILLATT

in Lugano

As in air international crises, whoever else wins' or loses over the Falklands confronta- . tion, the Swiss banks seem certain to come out ahead. They always profit when the world enters an era of uncertainty. ’- ■’< Since the British and the Argentines, squared up in the South Atlantic, funds have reportedly been pouring into the banks of Zurich and Geneva; funds belonging to people who fear that the upheaval may in some way cost them some-' thing. Once the trouble is over, a lot of this money may find its way back to where it came from. But, as usually happens, some of it will probably stay on, to the banks’ and Switzerland’s advantage. In this case, their big gain is likely to be in deposits from firms and individuals in Argentina, which, according to Swiss sources, have in the past few weeks transferred “millions

upon millions” of dollars from banks in America to those in Switzerland. They’ve acted in tlie-fear that the United States authorities may follow the example of the Bank of England, and freeze Argentine. assets; both to 'increase pressure on the junta to remove its troops from the Falklands and protect the interests of United States banks with loans, outstanding to the' South American republic. In Zurich they say that the switch to the Swiss was initi-ated-by the Central Bank of Argentina itself, which is reported to have transferred some $BOO million in deposits from one side of the Atlantic to the other, as soon as the trouble started. This could be bad for America, which has been the traditional haven for expatriate funds from Argentina, as from the South American countries as a whole. In view of the anger aroused by the Reagan

Administration's backing of Britain over the Falklands, which is not likely to abate quickly after the crisis is over, at least some of these funds may stay with the Swiss. The news is not all that good for the City of London either. Britain i's usually the alternative depositary for dollar capital when, for one. reason or another, its owners become worried about leaving it in the United States. In the present situation, there’s nothing doing, for obvious reasons. Again the adverse impact may be long rather than short term.

The Swiss are not gloating over their good fortune, but the banks must feel a certain satisfaction that they have scored again. As so . often in history, the latest international crisis may not have won thejn any friends, but it has certainly earned them some new customers. —. Copyright, London Observer Service; • ■