The cantonal bank model in Switzerland

Two waves of foundations

The Zürcher Kantonalbank was neither the first nor the only cantonal bank. The HLS distinguishes two waves of foundations. The first cantonal bank was established in Bern in 1834. Between the 1840s and the 1850s a first wave created eight mixed banks with state participation: Vaud in 1845, Fribourg and Lucerne in 1850, Neuchâtel in 1854, Aargau in 1855, Valais in 1856, Solothurn in 1857 and Ticino in 1858. State mortgage offices were founded in Bern in 1846, Geneva in 1847 and Vaud in 1858. A second wave, from the 1860s to the 1880s, produced pure state banks: Basel-Landschaft in 1864, St Gallen in 1867, Zurich, Thurgau and Graubünden in 1870, Appenzell Ausserrhoden in 1875, Nidwalden and Schwyz in 1879, Schaffhausen in 1882, Glarus in 1884 and Obwalden in 1885. Zug followed in 1891, Basel-Stadt and Appenzell Innerrhoden in 1899, Uri in 1915 and Jura in 1978.¹

The HLS links the second wave directly to the democratic movement. The banks of this period were all pure state banks, created as instruments of the democratic programme of cheap credit. The mixed banks of the first wave, in which private shareholders sat alongside the state, subsequently converted into pure state institutions in order to resolve the conflict between the shareholders’ interest in profit and the public interest in cheap credit.² The Zurich model, a pure state bank with a full guarantee and a statutory purpose, thus became the dominant type of Swiss cantonal bank. Basel-Landschaft, where the democratic movement had begun in 1861, founded its bank in 1864, while Thurgau, the third canton in which the democrats won a complete constitutional victory, created its cantonal bank in the same year as Zurich.³

The Verband Schweizerischer Kantonalbanken of 1907

The foundation of the Swiss National Bank in 1907 changed the position of the cantonal banks. As long as they had issued notes, they had co-operated in a concordat of issuing banks. When note issue ended, the concordat lost its purpose. In 1907 the cantonal banks therefore founded the Verband Schweizerischer Kantonalbanken (VSKB), the Association of Swiss Cantonal Banks. In 1911 the association concluded an agreement with the Swiss banking cartels to divide the market for loans to the Confederation and to public-law corporations equitably.⁴ The association still exists, with its seat at Wallstrasse 8 in Basel, as the umbrella organisation of the 24 cantonal banks. It maintains a common brand and represents their interests in banking policy.⁵

The creation of a common association in the year of the SNB’s foundation is typical of Swiss banking organisation. The cantonal banks remained independent institutions owned by different cantons, yet they co-operated closely in matters of common interest: in the placement of public loans, in the issue of mortgage bonds through a central institution, in fund management and in lobbying. The fund company Swisscanto, which the Zürcher Kantonalbank acquired in 2014, grew out of that co-operation (see Section VIII).⁶ The association of 1907 thus gave institutional form to the idea that the cantonal banks formed a group, the “third pillar” of Swiss banking alongside the big banks and the private and regional banks.

Notes

1. Froidevaux, “Banche cantonali”, DSS (cited above), sections on the two waves of foundations. ↩
2. Froidevaux, “Banques cantonales”, DHS (cited above). ↩
3. Bürgi, “Demokratische Bewegung”, HLS (cited above), and Froidevaux, “Banche cantonali”, DSS (cited above). ↩
4. Froidevaux, “Banche cantonali”, DSS (cited above), section on the association of 1907. ↩
5. Verband Schweizerischer Kantonalbanken, “Verband”, https://vskb.ch/verband. ↩
6. Wikipedia (German), “Swisscanto”, https://de.wikipedia.org/wiki/Swisscanto, which describes Swisscanto Holding, founded in 1993, as the umbrella company for the jointly managed asset management and pension business of the cantonal banks, and records the cantonal banks’ decision of 10 December 2014 to transfer the group to the Zürcher Kantonalbank with retroactive effect from 1 July 2014. ↩

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 September 2025.