What the long history left to the financial centre

Location and the value of the crossing

The first legacy of the period from Turicum to the late medieval city is location in the fullest sense. Zurich lies where a long lake, navigable deep into the Alpine foreland, empties into a river flowing towards the Rhine, at a point where overland routes from the west, the north and the east converge and where, from the thirteenth century, one of the main approaches to the Gotthard began. The Roman state recognised this by placing a customs station on the Lindenhof, as did the Carolingians by establishing a royal fisc whose estates reached into Uri and the Salian emperors by building a palace. The thirteenth-century council followed by constructing a Kornhaus and bridges, the fourteenth-century city by allying itself with the communities that controlled the passes. Each of these decisions reflected the same insight: that the crossing of the Limmat was a place where goods, and therefore money, had to stop.

The modern financial centre inherits this situation in a transformed form. The goods that stop in Zurich today are, for the most part, intangible: payment instructions, securities, insurance risks, assets under management. The infrastructure through which they pass is electronic. Yet the logic of the transit point remains recognisable. A financial centre is a place through which flows are routed because the costs of routing them elsewhere, in terms of trust, expertise, legal certainty and convenience, are higher. The Roman customs officer at Turicum profited from the fact that merchants could not easily avoid the reloading point at the lower end of the lake. The Zurich bank of today profits, in a comparable though much more complex sense, from the network effects, legal infrastructure and reputation which make it costly for clients and counterparties to go elsewhere. It is a small irony of history that the Lindenhof, where Unio collected the fortieth of the Gauls, lies within a few minutes’ walk of the Paradeplatz and the Bahnhofstrasse.

Toll, transit and the fiscal habit

The second legacy concerns the relationship between public authority and commercial flows. From the quadragesima of the Roman period to the toll and market rights of the abbess and the tolls later controlled by the city, the exploitation of transit was a constant source of public revenue in Zurich. The actors changed: an imperial freedman, a royal abbess, lay moneyers and toll collectors, the civic council. The underlying principle was the same. Public power in Zurich was, to a considerable extent, financed by commerce, and commerce was in turn protected, regulated and made predictable by public power. This reciprocity produced a characteristic political culture: those who governed the town were themselves engaged in trade and understood its needs, while the protection of the market peace was a central task of government.

For the modern reader, this history helps to explain a certain Zurich reticence about fiscal matters. A community that for centuries lived from the flows passing through it developed an acute sense of the point at which the burden on those flows becomes counterproductive. Just as the Roman duty of two and a half per cent was moderate, the medieval tolls of the Zurich market had to be competitive with those of rival routes and rival markets. The calculated moderation of fiscal and regulatory burdens, which remains a recurring theme of Swiss financial policy, has deep roots in the experience of a transit economy.¹

Institutional continuity and incremental change

The third legacy is institutional. The history traced in this chapter is one of remarkable continuity of function combined with gradual transfer of rights. The Lindenhof was the seat of public authority from the Roman fort to the Salian palace. The right to create money passed from the Swabian duke to the abbess, from the abbess to the moneyers who operated the mint, and finally to the city. The advocacy followed a similar path from the Lenzburg counts to the Zähringer, from the Zähringer to the king and from the king to citizen advocates, before the city itself acquired it in 1400. At no point did these transfers depend on the abolition of the prior legal title. They proceeded through grants, leases, pledges, purchases and the slow accretion of practice.

Congenial to lawyers, this mode of change has unsurprisingly marked the legal culture of Zurich. Swiss law, Zurich practice in particular, tends to prefer the development of existing institutions to their replacement, the negotiated solution to the imposed one and the respect of acquired rights to their expropriation. The migration of the regalia from the Fraumünster to the civic council is an early example of a pattern that recurs in the later history of the financial centre: in the development of private banking out of the merchant houses, in the gradual transformation of self-regulation by professional associations into formal supervision and in the incremental adaptation of banking secrecy to international standards in the twenty-first century. While later chapters of this book will trace those developments in detail, the present chapter shows that the pattern is very old.

Self-government, written law and the reputation of the city

The fourth legacy is the tradition of civic self-government anchored in written law. The grant of imperial immediacy in 1218 placed the government of Zurich in the hands of its own leading families, and within a generation those families had codified the law of the town in the Richtebrief. The council that emerged in the thirteenth century was narrow, oligarchic and far from democratic in the modern sense. It was also, however, a body that legislated publicly, that bound itself to written rules and that treated the peace of the town and the security of the market as its supreme concern. Those are the preconditions of commercial trust. A merchant who came to Zurich in 1300 could know in advance which rules would govern his dealings and which authority would enforce them.

The reputation of Zurich as a place of order, reliability and sobriety, so central to its appeal as a financial centre today, has many sources, among which the Reformation discussed in Part B is one of the most important. But the medieval foundations should not be forgotten. The Latin motto reported by Otto of Freising, Nobile Turegum multarum copia rerum, expresses the self-image of a town whose dignity rests on the abundance of what passes through it. The Richtebrief expresses the conviction that such abundance requires rules. Together, the two formulae summarise much of what Zurich has aspired to be ever since.

A comparison with Geneva

The comparison with Geneva, treated in the companion volume, underlines both the common and the distinctive features of Zurich’s early history. Both cities were customs stations of the quadragesima Galliarum at the outflow of a great lake. Both owed much of their medieval development to ecclesiastical lordship: in Geneva the bishop, in Zurich the abbess of the Fraumünster and the canons of the Grossmünster. Both emancipated themselves from that lordship through a gradual process in which the citizens took over rights of government. The differences are, however, significant. Geneva’s medieval prosperity rested above all on its international fairs, which attracted merchants and bankers from Italy and elsewhere in the fifteenth century, before they migrated to Lyon.² Zurich’s prosperity rested on a combination of regional market functions, transit trade and the textile crafts, above all silk, supported by a territorial state that the city itself built up. Whereas Geneva remained a city without a significant hinterland, Zurich became the capital of a territory. That difference would shape the character of the two financial centres for centuries: Geneva oriented towards international and personal networks, Zurich towards the organisation of a large domestic economy and, later, towards industrial finance.

Notes

1. For the Roman duty of 2.5 per cent collected at Turicum see Wikipedia (German), “Turicum”, https://de.wikipedia.org/wiki/Turicum (“Es wurde ein Zoll von 2,5 Prozent erhoben”). The link drawn to the moderation of modern Swiss fiscal and regulatory policy is the author’s interpretation. ↩
2. “Medici Bank”, Wikipedia (English), https://en.wikipedia.org/wiki/Medici_Bank, on the gradual move of the Medici branch from Geneva to Lyon, completed in 1466, because of the reduction in traffic at the Geneva fairs and the establishment of four major fairs at Lyon, which attracted some 140 other Florentine firms; Guillaume Lamy, “Histoire de Lyon : Lione, place bancaire de l’Europe”, Lyon Capitale, 19 July 2020, https://www.lyoncapitale.fr/?p=213976, on Louis XI’s letters of 8 March 1463 authorising four fairs at Lyon. The subject is treated in the companion volume on Geneva. ↩

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.