Working Paper Series _______________________________________________________________________________________________________________________ National Centre of Competence in Research Financial Valuation and Risk Management Working Paper No. 331 How much is Banking Secrecy Worth? The Case of Swiss Banks François-Xavier Delaloye Michel Habib Alexandre Ziegler First version: July 2006 Current version: March 2010 This research has been carried out within the NCCR FINRISK project on “Corporate Finance, Market Structure and the Theory of the Firm” ___________________________________________________________________________________________________________ How Much is Banking Secrecy Worth? The Case of Swiss Banks François-Xavier Delaloye¤ Michel A. Habiby Alexandre Zieglerz Abstract We use an early episode of negotiations between Switzerland and the European Union to investigate the value of banking secrecy for four Swiss banks: two universal banks and two private banks. We nd that the value of banking secrecy to private banks is large, accounting for at least 8 to 14% of their market value. Perhaps surprisingly, banking secrecy appears to account for only a very small fraction of the market value of the universal banks. JEL Classication: G14, G18, G21 Keywords: Banking Secrecy; Switzerland; Event Study ¤Hedge Fund Group, Private Wealth Management, Deutsche Bank AG, London, UK, tel.: +44-(0)207- 547-8719, e-mail:
[email protected] . This article represents the views of the authors and not those of Deutsche Bank. ySwiss Banking Institute,