Switzerland is famous for many cliché things, including luxury chocolate of the very best, some of the finest cuckoo clocks to be found in the world, excellent luxury horology and the Papal Swiss Guard. Switzerland is also well known as being the home to Swiss banking something that predates the world's largest economy.

Swiss banking is synonymous with excellent security, privacy of the very best and privilege and it is no surprise that an estimated 25% of the wealth of the world created to date has passed through the Swiss Banking System. The reality of this legend has been seen in films, books and popular culture to this day. The image of a numbered account, whose holder is only disclosed to upper management along with the most discreet of bankers accompanying the hero to a luxury private room is abound.

Yet like so many things, the integrity of these vulnerable banking institutions has been rocked by the global capital crisis which has enveloped the world over the past two years.

Indeed, in the tradition of integrity, UBS, Switzerland's largest bank and one of the very best, was amongst the very first banks to wash their dirty linen in public and suffered a $32 Billion write down of toxic assets. They were also amongst the first banks to ask for direct government help in plugging the holes in their balance sheets, and in the mean time they safely returned the favor to their very own government. Needless to say, Switzerland has weathered the storms of the past century very well. At the beginning of the Second World War, they were a luxury haven for the politically ostracized and provided a haven from Nazi persecution. There is some controversy about the role of Switzerland in the heyday of the Nazi war machine, but the state maintained its neutrality and became one of the only places where capital could move in the dark days of the Second World War.

At the war’s end a devastated Europe used Switzerland as the economic counting house, through which enormous sums of reconstructive work capital moved, and even at the height of the cold war, and the proximity of the Swiss borders to the great bear of the USSR could not stop the Swiss from continuing their reputation of the finest banking excellence.

Indeed these days of uncertainty and crisis became important to the Swiss, the services and security they offered proved to be a real tonic for those who had undergone the trauma of war. A generation of people relied on the Swiss banking industry to provide the luxury of stability in an uncertain world, and the psychological mind-set created cannot be denied. Swiss meant safe, Swiss meant private and most of all Swiss meant secure. Amid the current economic uncertainty they did post losses, but in the end the $32 billion written was a drop in the ocean compared to the likes of Lehman’s, or even RBS and ABN Amro. Swiss still means very much the same thing.

The Swiss government, with an eye to the importance of this industry to the country’s economy, has set up what could become the blueprint for the post crisis world economy in terms of a watchdog for the industry as a whole.

The Federal Committee is, in the best traditions of the country, entirely neutral and separate from both government and the industry. In short, it works.

Capital limits are being imposed on the Banks and so the chance of the same risks being taken with highly speculative derivatives cannot happen again and Swiss banking again seems to be one of the very best and most attractive options in the world.

Editorial | Image Bigstockphoto