In December 2013 the Neue Zürcher Zeitung held its “2014 financial markets roundtable” with the chief strategists and economists of Swiss banks Pictet, UBS, Credit Suisse, and Julius Bär.
The resulting 3300 word article has the experts opining on a broad range of topics including the policies of the Federal Reserve and the European Central Bank, the risks of a new financial crisis, Germany’s new coalition government (“Germany could be the new France”), Ireland, Spain, immigration, inflation, stock markets, gold markets, commodities, and real estate.
A recent blogpost by Simon Johnson, a former IMF chief economist, introduces the idea of a “rich country trap”. In developed countries with large financial sectors “top financial-sector executives…enjoy such high prestige that they are still called upon to run public finances. Politicians continue to defer to the supposed wisdom of these individuals”. As there is “no sector…that is willing to stand up to big banks in the political arena” the eventual result is that the financial system destabilizes the whole economy.
The NZZ article – which could have been titled “These Four Wise Men Will Now Explain Everything” – is a clear example of this excessive deference to the financial sector (includes photographs of the interviewees striking authoritative poses).
It would probably have been considered impolite of the NZZ to mention that all of these banks have been linked to tax evasion in the US, France and the Netherlands, among other countries. But since the point of the roundtable was to discuss the outlook for 2014, wouldn’t it at least have been worth asking about the future effects of FATCA, or of Switzerland currently not meeting OECD standards on tax and transparency, or of the pressure on Switzerland to sign up to EU tax transparency agreements?