UBS Group AG’s hastily brokered takeover of Credit Suisse Group AG and the job cuts likely to follow are undoubtedly a blow for Swiss self-esteem as a global financial center, yet the wider economy looks well-placed to weather the fallout.
Low federal debt levels, the strength of the Swiss franc and a flexible labor market with comparatively little employment protection act as built-in stabilizers, according to Christian Schulz, deputy chief economist for Europe at Citigroup Inc.
This gives the government financial headroom to weather crises, while the currency attracts investors as a safe haven.
Source : Switzerland’s Resilience Could Help Weather Banking Turmoil, Say Economists