2023-05-13 21:30:00
Unscrupulous bankers shape the image: Leonardo DiCaprio plays stock trader Jordan Belfort in the 2013 Hollywood film “The Wolf of Wall Street”.
Photo: Mary Cybulski
Since the rescue of UBS in the financial crisis of 2008, the bankers have strained our attention – like a difficult young person who overwhelms parents, social workers, police, authorities and courts and cannot be tamed without an expensive special setting.
This can only be justified by the danger that the big banks pose to the financial system. The balance sheet total of the new UBS is twice as large as Switzerland’s economic output.
The expense for the big banks can no longer be justified with their economic importance – which is constantly decreasing. In the last twenty years, the share of banks in total value added in Switzerland has fallen from over 7 to 3.8 percent, and that of UBS and CS from 3.1 to 1.2 percent.
The other large financial service providers, the insurance companies, are now economically more important with a share of 4.2 percent. Zurich Insurance is worth 20 percent more on the stock exchange than UBS, which has four times the balance sheet total.
Only politicians, soccer players and advertisers enjoy less trust than bankers, financial and insurance advisors.
The big insurers are profit machines, as can be seen from the magnificent buildings on Zurich’s Mythenquai. Your top managers collect similar sums as their colleagues at the big banks – and they are just as bonus-driven. The variable salary component for Zurich boss Mario Greco was more than four times as high as his fixed salary in the 2022 financial year. The relationship with last year’s UBS boss Ralph Hamers was exactly the same.
Despite this, they are far less in the limelight. You do not need a constant special setting. Your image is intact. Why is the perception of the two industries so different?
As late as the 1960s, the righteous bank clerk was more respected than the windy insurance salesman. In the feature film “The gentleman with the black bowler hat”, Walter Roderer, the epitome of the Bünzli actor, played the bank clerk.
But that changed quickly. The Credit Suisse Chiasso scandal in 1977 had paved the way for a new generation of bankers to the top. In 1978, under Rainer E. Gut, CS bought into one of the most aggressive Wall Street banks, First Boston. With her, CS should move up to become one of the world’s largest financial service providers and play in the “Masters of the Universe”. The American bonus culture took hold: if the risk pays off, the bankers win, if there are losses, the shareholders pay.
Insurance employees are considered boring, stuffy and well-behaved, like Jim Carrey in “The Truman Show” or Ben Stiller in “… and then came Polly”.
Michael Douglas, aka Gordon Gecko, played the banker of the 1980s in the 1987 film “Wall Street”. His motto: “Greed is good.” In the parliamentary debate on the takeover of Credit Suisse by UBS, SP Councilor Eva Herzog compared the CS bankers to the stock trader Jordan Belfort played by Leonardo DiCaprio in the Hollywood film “Wolf of Wall Street”, whose unscrupulousness eroded the image of the banker in the 90s -years.
Insurance employees, on the other hand, are considered boring, stuffy and well-behaved, like Jim Carrey in “The Truman Show” or Ben Stiller in “… and then came Polly”.
Plain, good, boring: Jim Carrey plays an insurance salesman in the 1998 Hollywood film “The Truman Show”.
Photo: Alamy
Ambitious managers tried to get rid of the boring image and move up to the big names in the USA. But unlike at CS, the shareholders ultimately did not play along.
In 1997, the then Zurich boss Rolf Hüppi merged the insurance company with a US asset manager and a finance department to form the all-finance group “Zurich Financial Services Group”. After billions in losses, his successor put an end to all financial dreams, and since then it has been called Zurich Insurance Group again.
Insurance was also “too boring” for former investment banker Jacques Aigrain, head of Swiss Re from 2006. He relied on risky financial transactions, which promptly tore a billion-dollar hole in the balance sheet. The rescue came from US investor Warren Buffett.
Financial markets serve both prudent insurers and reckless gamblers, allowing for both risk diversification and betting. It is no coincidence that gambling, the stock market and insurance have a common origin in 17th century London coffee houses.
Losses running into the billions and stricter supervision forced insurers to reflect. The case of the world’s largest insurer AIG, which had to be rescued by the American state after its financial bets collapsed in 2008, shows what would have happened otherwise.
The “boring” insurance could be a model for the new monster bank UBS.
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– No more special settings for big banks
After scandals and billions in losses, insurance companies came to their senses. A role model for UBS? The new monster bank could draw these lessons from it.