The Banking Act of 1934 and Article 47

A law born of crisis

The Federal Act on Banks and Savings Banks of 8 November 1934 was the Confederation's answer to the banking crisis of the early 1930s. Chapter C.IV recalls its genesis: a first federal banking bill drafted in 1916 remained in the files until the failure of the Banque de Genève in 1931 and the rescue of the Swiss Volksbank in 1933, which required CHF 100 million of federal support, made legislation unavoidable. A later finance minister called the act a "daughter of necessity". It entered into force on 1 March 1935 and created the Federal Banking Commission, an independent authority of five members charged with the protection of creditors through rules on liquidity and capital.¹ Most of the act concerned prudential matters: licensing, capital, liquidity, audits, the publication of accounts and the privilege of savings deposits in bankruptcy. One provision went beyond prudential supervision. Article 47 made the violation of banking secrecy a criminal offence. In its original version it punished members of a bank's organs, its officers and employees, its auditors and the members and staff of the Banking Commission who violated their duty of confidentiality or professional secrecy, as well as anyone who incited or attempted to incite them to do so. The penalty was a fine of up to CHF 20,000 or imprisonment of up to six months, and both penalties could be combined.² The Historical Dictionary summarizes the effect: banking secrecy, which rested until then on contract and on the general protection of personality in civil law, was anchored at the level of statute in 1934 with criminal sanctions for its violation.³ An offence under Article 47 was prosecuted by the State. A banker who disclosed client information to a foreign authority, a foreign agent or a journalist now risked prison in Switzerland.

The Basler Handelsbank affair of 1932

The origins of Article 47 have been the subject of a long historical debate. The most immediate trigger was a French affair. On 27 October 1932 French police officers, acting on the initiative of the finance minister Louis Germain-Martin, searched premises in Paris used by the Basler Handelsbank (Banque commerciale de Bâle) and seized account records and lists of clients. The documents showed that the bank's representatives had helped wealthy French residents to place money in Switzerland without declaring the income to the French tax authorities.⁴ On 8 November 1932 the socialist deputy Fabien Albertin raised the matter in the Chamber of Deputies and read out names of clients. The press reported that the list included generals, bishops and industrialists, among them members of the Peugeot family.⁵ The seized records concerned more than a thousand clients. In the end fewer than one hundred were prosecuted after parts of the proceedings were annulled.⁶

The affair put the Swiss authorities and the Swiss banks under direct pressure. France asked Switzerland for legal assistance to obtain further information, and the Federal Council refused, invoking the protection of the national economy.⁷ For the banks, the lesson was that their employees and their foreign branches could become sources of information for foreign tax authorities. A statutory secrecy protected by criminal law would deter employees from cooperating with foreign investigators, give the banks an argument against foreign requests and reassure clients that their names would not be read out in a foreign parliament. Sébastien Guex, who reconstructed these events from the archives, has argued that the protection of foreign tax evaders and the defence of the Swiss financial centre against the fiscal claims of neighbouring States were central motives of the legislators of 1934.⁸

Notes

1. Balz Bruppacher, "La vigilanza sulle banche in Svizzera: una breve storia degli scandali", swissinfo.ch, 29 July 2026, https://www.swissinfo.ch/ita/posizione-svizzera/la-vigilanza-sulle-banche-in-svizzera-una-breve-storia-degli-scandali/91769822 ("figlia della necessità"; adopted 8 November 1934, in force 1 March 1935; five-member commission). ↩
2. Federal Act on Banks and Savings Banks of 8 November 1934, original version, Art. 47 (BS 10, 337). ↩
3. Guex, "Piazza finanziaria" (above): banking secrecy "ancorato sul piano legale nel 1934" with criminal penalties for its violation. ↩
4. Wikipedia (French), "Affaire de la Banque commerciale de Bâle", https://fr.wikipedia.org/wiki/Affaire_de_la_Banque_commerciale_de_B%C3%A2le (consulted as a last resort), naming Commissioner Roger Barthelet of the Sûreté générale and the finance minister Louis Germain-Martin. See also Sébastien Guex, "1932: l'affaire des fraudes fiscales et le gouvernement Herriot", L'Économie politique no. 33. ↩
5. Wikipedia (French), "Affaire de la Banque commerciale de Bâle" (above); Wikipedia (English), "Banking in Switzerland", https://en.wikipedia.org/wiki/Banking_in_Switzerland (generals and bishops); Wikipedia (German), "Schweizer Bankgeheimnis" (above) (Peugeot family). All consulted as a last resort. ↩
6. Wikipedia (French), "Affaire de la Banque commerciale de Bâle" (above). ↩
7. Wikipedia (French), "Affaire de la Banque commerciale de Bâle" (above). ↩
8. Sébastien Guex, "The Origins of the Swiss Banking Secrecy Law and Its Repercussions for Swiss Federal Policy", Business History Review 74 (2000), 237–266, https://doi.org/10.2307/3116693. ↩

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.