Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector was able to develop and thrive. Even though it is near Europe’s geographical centre, Switzerland maintained neutrality through both World Wars; is not a member of the European Union or the European Economic Area; and was not even a member of the United Nations until 2002.
Currently an estimated one-third of all funds held outside their country of origin (sometimes called "offshore" funds) are kept in Switzerland. In 2001 Swiss banks managed US$ 2.6 trillion. The next year it only handled US$2.2 trillion, US$400 billion less than before. This has been attributed to both a bear market and possibly to stricter regulations on Swiss banking.
The Bank of International Settlements, an organization that facilitates cooperation among the world’s central banks, is headquartered in the city of Basel. Founded in 1930, the BIS chose to locate in Switzerland because of the country’s neutrality, which was important to an organization founded by countries that had been on both sides of World War I.
Foreign banks operating in Switzerland manage 870 billion Swiss francs worth of assets (as of May 2006).
