The Transformation of the Swiss financial place

Summary

Applicants: Felix Bühlmann

Collaborators : Lena Ajdacic, Johanna Behr et Amal Tawfik

Duration: 2023 - 2027

In the 20th century, a blend of domestic personal banking and wealth management for very rich international clients, profiting from Switzerland’s banking secrecy, dominated the Swiss financial sector. Since the 1990, this business strategy was completed by the participation of the two large Swiss banks in the market of American investment banking. Two of these central pillars of Swiss banking collapsed in recent years: while the financial crisis forced UBS and Credit Suisse to retire largely from US investment banking, the Swiss banking secrecy got broken in 2014 by the international pressure for harmonized fiscal policies. At the same time, supported by the Swiss governments, new actors entered the scene of Swiss finance and proposed alternative strategies: fintech, crypto, private equity/ venture funds and independent wealth managers. These actors of “alternative finance” were smaller, relied on different organizational models and championed future-oriented business models.

Based on a field theoretical model we seek to analyze how these new actors (whom we call “challengers”) enter the Swiss financial field and how they try to assert themselves against the established bankers (the “incumbents”). We focus on three questions relating to three specific power configurations within Swiss finance:

1. Early careers and career ambitions in the Swiss field of finance:
   Studying the graduates of the major master’s programs in “finance” at Swiss Universities between 2005 and 2015 (n=3000), we investigate early career trajectories with sequence analysis and their ambitions with qualitative interviews (n=30). We ask how early trajectories and career ambitions of young professional refer to incumbent and challenging finance sectors and what these career decisions tell us on their relative status.
    
2. Positions and dispositions of Swiss financial elites:
   Based on a prosopographic sample (n=1000) of elites from both incumbent firms (banks) and challenging firms (fintech, private equity, venture capital, independent wealth managers), we study the hierarchical structures within the Swiss finance field with multiple correspondence analysis and then investigate if these structural relationships are linked to specific representations (of finance, interests and strategies) with qualitative interviews (n=30). We ask which oppositions and hierarchies structure the space of positions of the top-managers in the Swiss financial fields and how these positions are related to incumbent and challenging sectors.
    
3. The political project of Swiss finance:
   To understand the political positions of traditional banking vs. alternative finance we study the participation of the institutional representatives of these sectors in the pre-parliamentary consultation of the financial policy in Switzerland between 2000 and 2020.

Using a combination of topical modelling and multiple correspondence analysis, we analyze the most important policy projects, identify the policy strategies of incumbents and challengers (including their broader political coalitions) and investigate (with a text-reuse approach) who’s positions prevail in the final versions of the law. This research project investigates a decisive transformation of an emblematic sector of Switzerland’s economy. Its innovative research design sheds light on both structural changes and individual representations and studies how they interact.