Thomas Signer, SBS Swiss Business School

1. Applying the Swiss Experience to Riga as an International Financial CenterBanku Augstskola Conference Riga, October 13, 2006 Thomas Signer, SBS Swiss Business School

2. Switzerland • - Pop of 7.5 million • - GNI €290 bn / €39K per capita (´04) • World‘s most competitive & least corrupt country • Ø GDP Growth 95-04: 1.3% p.a. • Not member EU • Financial Sector • - employs 200‘000 (5.3% of work f.) • 14% of GDP • manages ~ €3 trillion, half foreign • home to 1/3 of all off-shore assets

3. Swiss Banking – the Players • 2 global giants #1 #2 • ~220 banks focused on wealth mgnt (150 foreign owned) • ~100 banks focused on domestic retail & corporate banking

4. Swiss Financial Market + • Banking tradition; discretion • Highly educated workforce; multilingual, multicultural • Stable political framework, Swiss Franc • Prudent regulatory oversight; well developed judicial system • Transparent business practices; „trust“ society

5. Challenges to Swiss Financial Market • Absence of private equity & hedge fund managers • Negative „profiteering“ image  compliance costs • Non-EU member status  vulnerable • CHF no longer alternative to EUR • Strong in slow growing Western European markets; weak in fast growing emerging Eastern & Asian mkts • Competition:London/Luxembourg/Singapore/Riga?

6. Opportunities for Riga • Provide business friendly (little) regulation & (low) taxation • Use advantage of low cost as entry: move from „back office“ to „front office“ • Focus on neglected markets in former Soviet Union • Be proud of building a financial center • Latvians leaving will bring back know how • Focus on education targeted to the opportunity