| Origin |
Geneva banking partnerships, with partner private (meaning personally unlimited)
liability, offering traditionally conservative services to the old wealth
of Europe and the French Revolution, social unrest, popular democracy,
redistributive taxation etc all providing helpful support to demand growth
ever since
|
| Definition |
Private Banking, in the Geneva tradition, means the preservation of family
assets by their protection from: 1. taxation and other government intervention,
2. market and political risk and 3. forced rules of succession (legitime
Fr iryubun Jp) and family breakdown and is highly conservative in its service
philosophy
|
| Expansion |
There has been a post-War 1. wider market + 2. higher profit margin trend:
1. client towards developing world funk money, overseas Chinese entrepreneurial
assets and even expatriate employee savings and 2. provider towards larger
financial institutions aggressively offering in-house structured 'high
risk/high return' retail product
|
| Categories |
The term 'Private Banking' has consequently been markedly devalued and now generally means the privateness of the client and not of the provider, and is on-shore or off-shore and personalised or retail in the four permutations according to the tax location of the master account and quality and depth of service offered
|
| Swiss vs US (i) |
Simple labels for the two extremes of the service spectrum permutations:
off-shore personalised in the Geneva tradition of conservatism, risk avoidance
and asset preservation versus on-shore retail in the New York tradition
of high risk/high return through aggressive exposure to in-house structured
products
|
| Swiss vs US (ii) |
Swiss equates to extreme confidentiality and effective tax avoidance and
US to asset growth and tax efficiency, while global regulatory developments
favour the US on-shore retail services that are so highly profitable and
these are becoming the one-size-fits-all product offered by larger financial
institutions worldwide: 'McPrivate Banking'
|
| Japan (i) |
Rapid economic growth in late Meiji and early Taisho led to pools of enormous
private wealth that were managed on an on-shore personalised basis notably
using then-trust company vehicles, but this native tradition was wrecked
in early/mid-Showa by war, confiscatory taxation and eliminated by adverse
tax + financial policy
|
| Allfinanz |
The Heisei Reform 'Allfinanz' is restructuring the financial economy
towards a Taisho-style disintermediation, universalisation and a public/private
sector level playing field with on-shore mass market low-end retail private
banking services made available to reweight household financial assets
towards a higher risk/return profile
|
| Japan (ii) |
'Allfinanz' is closely integrated with the other three Heisei Reform
programmes of re-inventing Japan ('FILP', 'Local Government', 'Tax'),
has important tax revenue implications, foresees foreign players as 'international
specialists' and thus makes foreign offered Private Banking services a
peculiarly problematic and sensitive area
|