Zurich, Basel and Geneva: competition among cantonal exchanges

A country of several exchanges

Before 1914 Switzerland had no national exchange. Each of the larger commercial cantons had its own market, governed by its own law and serving its own community of banks and investors. The Historisches Lexikon lists the sequence of foundations. Securities trading began in Geneva around 1850, with a recognised exchange by 1856. Basel followed in 1876, Zurich in 1884, Lausanne in 1873, Bern in 1885, Neuchâtel in 1905 and St. Gallen in 1933. The smaller exchanges specialised in regional securities.¹ Other sources give slightly different years, such as 1866 for Basel, 1873 for Zurich and 1884 for Bern.² The divergences arise from the same layered process that has been described for Zurich, in which an association, a price list, a building and a law each mark a possible beginning.

The fragmentation of the Swiss market had several causes. The federal state of 1848 had created a single currency and a single customs area, but it had left the regulation of trades and markets to the cantons. The large banks were themselves regional before 1900, rooted in Zurich, Basel, Geneva, Bern or St. Gallen. Investors bought mainly the securities of issuers they knew, which were usually those of their own region. The exchanges therefore served as regional capital markets, each with its own specialities, and competed with each other mainly for the listing and trading of the national issues: federal bonds, the shares of the large railway companies and banks, and foreign securities.

The rise of Zurich

In the course of the period covered here, Zurich overtook its older rivals. Several factors worked in its favour. The first was the concentration of large banks in the city. The Kreditanstalt was joined by the Eidgenössische Bank in 1892, by the Zurich business of the Schweizerischer Bankverein after the merger of 1895 and by the growing Zurich presence of the Bank in Winterthur, which in 1912 became part of the Schweizerische Bankgesellschaft. The second factor was the size of the Zurich economy, which grew rapidly with the incorporation of the suburbs in 1893, a step that made Zurich the largest city in Switzerland.³ The third was the concentration of insurance companies and finance companies in Zurich, which were both issuers and investors. The fourth was the regulatory model of the canton. It gave the market official status without nationalising it and so preserved the flexibility of a members’ organisation.

Guex dates the emergence of a true Swiss financial centre to the 1890s. He attributes the slow development before that date to an antiquated monetary system and to the strong entrenchment of the cantonal banks.⁴ The creation of the Swiss National Bank in 1907, which replaced the numerous note-issuing banks, accelerated the concentration of the banking sector. It also strengthened the position of the large banks, which were increasingly centred on Zurich. The National Bank itself is discussed in Part F. For the exchange, its founding meant a uniform currency and a central bank discount rate that influenced bond prices across the country. Differences between the regional markets diminished accordingly, which in turn favoured the market with the greatest liquidity.

Basel and Geneva

Basel responded to the problems of the 1890s with the most radical solution. Its law of 8 April 1897 nationalised the exchange completely, prohibited competing private associations and placed trading under a state exchange commission.⁵ Basel remained an important banking centre with a strong exchange. The initiative for the founding of the Swiss Bankers Association in 1912 came from Basel bankers, who kept its seat in their city.⁶ In the competition for the trading of national securities, however, Zurich drew ahead in the decades after 1900.⁷

Geneva retained its distinctive character as a market of independent agents de change, with close links to Paris and to the private banks of the city. The Geneva volume that accompanies this book describes the history of the Bourse de Genève in detail. Its interwar history, as studied by Oosterlinck and Pirotte, shows the independent Geneva brokers defending their market against the Swiss German banks, which had the capital and the client base to shift trading to Zurich and Basel.⁸ The foundations of that conflict were laid before 1914, when the Zurich exchange became a market of banks while the Geneva exchange remained a market of brokers. The English-language Wikipedia article on the Geneva exchange notes that its competitive advantage lay in allowing public access, which distinguished it from the later exchanges of Basel and Zurich.⁹

Notes

1. HLS, Meyerhans, “Börsen”, http://www.hls-dhs-dss.ch/textes/d/D13741.php. ↩
2. “Swiss Equity Markets”, Springer (2023), https://link.springer.com/chapter/10.1007/978-3-031-23194-0_9, which gives Basel (1866), Lausanne and Zurich (1873), Bern (1884), St. Gallen (1887) and Neuchâtel (1905). The Swiss Finance Museum also gives 1884 for Bern. ↩
3. HLS, Behrens, “Zürich (Gemeinde)”, http://www.hls-dhs-dss.ch/textes/d/D171.php. ↩
4. HLS, Guex, “Finanzplatz”, https://hls-dhs-dss.ch/textes/d/D45549.php. ↩
5. Bauer, Die Basler Börse 1876–1976, https://link.springer.com/chapter/10.1007/978-3-0348-6298-1_5. ↩
6. HLS, Youssef Cassis, “Schweizerische Bankiervereinigung (SBVg)”, version of 19.12.2002, https://hls-dhs-dss.ch/textes/d/D16469.php. ↩
7. Assessment of Zurich’s relative position among the Swiss exchanges before 1914. The later dominance of Zurich, which made it the seat of the integrated Swiss exchange in 1993, is well documented. ↩
8. Oosterlinck and Pirotte, “Stock exchange competition: the case of Geneva during the interwar period”, Financial History Review 25 (2018), abstract, https://www.cambridge.org/core/journals/financial-history-review/article/stock-exchange-competition-the-case-of-geneva-during-the-interwar-period/79BA46400B6B70947B0F9942754E51A3/core-reader. ↩
9. “Geneva Stock Exchange”, Wikipedia (English), https://en.wikipedia.org/wiki/Geneva_Stock_Exchange. ↩

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.