Mirabaud to Follow Pictet in Ending Unlimited LiabilityGiles Broom
Mirabaud & Cie., the Swiss private bank established in 1819, is following Pictet & Cie. and Lombard Odier & Cie. in dropping a centuries-old partnership structure under which bankers assume unlimited liability for losses.
While the managing partners will continue to own and manage the firm, Mirabaud plans to establish a corporate partnership overseeing a Swiss limited company from early next year, the Geneva-based firm said in an e-mailed statement late yesterday.
The move to end the unlimited liability partnerships favored by Geneva’s oldest private banks, and registered as a trademark in 1997, comes after the U.S. Department of Justice indicted Wegelin & Co. last year for helping American clients dodge taxes. While Mirabaud was never active in the U.S. cross-border market and isn’t one of 14 Swiss firms being investigated by the DOJ, the new structure is a response to increasing “regulatory constraints and requirements,” the bank said.
“We are always thinking about our structure,” Senior Partner Yves Mirabaud said in a telephone interview today. “All our personal assets are and remain committed to the bank.”
The firm said the new structure will help Mirabaud grow at home and overseas as a crackdown on secrecy makes it less profitable for Swiss banks to manage the $2.2 trillion of cross-border assets booked in the Alpine country. Mirabaud managed about 25 billion Swiss francs ($26.4 billion) for clients at the end of December.
Most employees already work under a limited liability company outside Switzerland, Mirabaud said.
“When you want to open a bank or structure in Asia or in the Middle East or somewhere else, it is true that limited liabilities type of companies are better understood than unlimited liability partnership by the regulators or by local authorities,” he said. “That’s why every time we have opened new operations it was done through limited liability companies.”
While Mirabaud said it planned to keep the unlimited liability model in February, when Pictet, Geneva’s largest bank, and Lombard Odier announced they would adopt new structures next year, the firm changed its mind two months later, the senior partner said.
The rejection last month by the Swiss Parliament of a proposed law to allow more banks to cooperate with the U.S. offshore tax-evasion probe could lead to another firm facing criminal charges, Finance Minister Eveline Widmer-Schlumpf said two weeks ago.
The Swiss-U.S. tax issue “illustrates nevertheless how risks are evolving,” Mirabaud was cited as saying today by Le Temps. “They are becoming more political and more difficult to predict, less controllable.”
Mirabaud plans to open a bank in Luxembourg next year to develop private banking activities in the U.K., France and Spain, the company said today.