Who watches the watchdogs? Central bank board members and banking supervisors in Switzerland (1907–2008)

Abstract

The Swiss financial center developed spectacularly during the 20th century, becoming one of the main hubs for cross-border financial transactions. The regulatory environment that enabled this growth is still poorly understood. This contribution examines the government appointees who controlled the banking supervisory institutions (Swiss National Bank and Federal Banking Commission). The focus is on the individuals who supervised those two institutions and analyzes the evolution of their board members from their creation, in 1907 and 1935 respectively, to 2008. This prosopographical study–using indicators such as gender, age, education, career paths and political affiliation–seeks to determine: a) their typical socio-professional profile, b) their closeness to the banking industry and c) their representativeness of society, politics, and business. My findings highlight both significant changes in the last decade of the century, with an increase in the level of education and a drop in political affiliation, and a long-term stability of the socio-professional profile of the board members: middle-aged to elderly men, with a PhD in law or economics, considerable experience in the banking or business world, and often an affiliation with the governing political parties. Both institutions were supervised by individuals with close connections to the financial industry. They became arenas for elite networking, simultaneously failing to represent large segments of society.