The National Council is faced with a crucial decision: should the Bundesrat revoke the mandate for the State Street bank to manage the AHV adjustment fund? The discussion about the security of AHV funds has caused waves in Switzerland, particularly in the context of potential international conflicts and sanctions.
By the end of 2023, Compenswiss, the public-law institution responsible for the AHV, awarded the prestigious mandate for the management of the AHV adjustment fund to the American bank State Street. The fund’s assets total over 40 billion francs. State Street, as the deposit bank, will handle administrative tasks such as transaction processing, dividend accounting and tax matters. UBS, which had held the mandate for 26 years, did not bid on the tender.
For Dagmar Kamber Borens, the Switzerland CEO of State Street, the contract was a significant success. However, critics, including politicians and experts, expressed concerns that the management of AHV funds by an American bank poses risks, particularly in the event of US sanctions against Switzerland.
The worry that the US might freeze Swiss assets in the event of a conflict has brought the Swiss politics into the picture. The National Council will soon decide whether to return the mandate to a Swiss bank. A corresponding motion was submitted by the Economic Commission of the National Council. SVP National Councilor Thomas Matter supports this demand, stating that the risk of confiscation, although low, should not be taken.
Kamber Borens of State Street rejects these allegations, emphasizing that the bank would not be more exposed to sanctions than a Swiss bank. In fact, as a systemically important bank in the US, it is unlikely that the American government would target State Street with sanctions. Moreover, the AHV fund’s assets are still held at sub-deposit banks in the country of origin, in Switzerland at UBS.
UBS, which had held the mandate for years, regrets the loss of the contract, but does not actively campaign for its return. The bank emphasizes that the deposit bank business remains important for it and sees itself as a leading provider in this field. The Swiss Bankers Association, of which UBS is the largest member, rejects the motion, arguing that State Street won the mandate in a fair and transparent process.
The debate over the deposit bank of the AHV adjustment fund reflects the complex geopolitical and economic challenges facing Switzerland. While some politicians demand the return of the mandate to a Swiss bank to minimize potential risks, others emphasize the importance of legal certainty and fair tender procedures. The National Council’s decision will not only have an impact on the future of the AHV adjustment fund, but also set a signal for international cooperation in the financial sector.