Flight capital, scandal and the end of secrecy: Parts D and E

How Lugano became the third centre

Part D explained the rise that gives this book its subject. Chapter D.I showed that the decades from 1914 to 1945 assembled the elements of the later boom while the volumes remained small. After the crash of 1914 the canton's banking system was rebuilt around the State bank, branches of the national banks and institutions linked to Italian banking groups. The Banking Act of 8 November 1934 made the disclosure of client information a criminal offence in its Article 47, at the moment when Fascist Italy established a foreign exchange monopoly and punished the export of capital.¹ The chapter's central observation was that a foreign prohibition and a Swiss duty of confidentiality combined to form the legal basis of the later business with Italian clients. Swiss law did not enforce foreign currency law and granted no assistance in currency and tax matters. Chapter D.II measured the result. In 1945 the canton had eleven banks with about five hundred employees. By 1982 it counted forty-four banking institutions with more than seven thousand.² Italy's economic miracle produced private savings on a new scale, while the strength of the Communist Party, rising tax pressure, a weak lira and terrorism gave those savings a reason to leave. Couriers known as spalloni, Italian stockbrokers, compensation deals and correspondent accounts carried them into numbered accounts, safe deposit boxes, bearer securities and Liechtenstein or Panamanian companies administered by the fiduciaries of Lugano and Chiasso. The Ticino bankers' association dates the international rise of the centre to the 1960s and 1970s and still describes Lugano as the third Swiss financial centre after Zurich and Geneva.³ Italy closed the door in 1976, when the illegal export of capital became a criminal offence punishable by imprisonment of up to three years.⁴

War at the southern border

Chapter D.I also showed the border at its most exposed. During the Second World War transit traffic through Switzerland quadrupled, and German coal exports made up 88 per cent of the total transit volume, much of it carried over the Gotthard and through Chiasso to Germany's Italian ally.⁵ Deserters, partisans, Jewish families and future leaders of the Italian Republic crossed the hills and lakes of the Sottoceneri. Some were admitted and some were turned back, a practice that the Independent Commission of Experts chaired by Jean-François Bergier examined as one of its central subjects. In March 1945 Lugano and Ascona hosted the secret negotiations known as Operation Sunrise, which ended the war in Italy a few days early. The chapter drew the line from these experiences to present law: Article 47 BankA, the capital flight chapter of the banks' code of conduct, the rules on dormant assets and the constitutional prohibition of refoulement. The two faces of the border, refuge for persons and channel for money, already appear side by side in these years.

Notes

1. See Chapter D.I. Federal Act on Banks and Savings Banks of 8 November 1934 (Banking Act, BankA), SR 952.0, Art. 47; on the Italian foreign exchange monopoly and the criminal penalties for capital exports see Chapter D.I and the sources cited there. ↩
2. Enrico Berbenni, "La mobilità territoriale della ricchezza finanziaria. La Lombardia e il confine italo-elvetico (1861–1980)", Archivio Storico Lombardo (2025), 329, https://riviste.unimi.it/index.php/aslonline/article/download/30555/26132/95136 ("11 banche con circa 500 occupati"; "Nel 1982 si contavano ben 44 istituti bancari con oltre 7000 impiegati"), as cited in Chapter D.II. ↩
3. Associazione Bancaria Ticinese, "Cenni storici" (above) ("Lo sviluppo e l'affermazione internazionale della piazza finanziaria di Lugano risale al Secondo dopoguerra e in particolare agli anni Sessanta e Settanta"; Lugano "quotata come la terza piazza finanziaria svizzera, dopo Zurigo e Ginevra"). ↩
4. Law of 8 October 1976, no. 689, converting with amendments Decree-Law of 10 August 1976, no. 543, which amended Law of 30 April 1976, no. 159, Art. 1, text at https://www.edizionieuropee.it/law/html/2/zn15_07_00k.html ("reclusione fino a tre anni e con la multa fino a lire 5 milioni"), as cited in Chapter D.II. ↩
5. Hans-Ulrich Schiedt, "Trafic de transit", DHS, version of 7 January 2014, https://hls-dhs-dss.ch/fr/articles/014051/2014-01-07/ ("Pendant la Deuxième Guerre mondiale, ce transit quadrupla; le charbon exporté par l'Allemagne représentait alors 88% du volume total du trafic de transit"), as cited in Chapter D.I. On Operation Sunrise and the refugee policy see Chapter D.I. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.