Geneva — Too much charm often carries a price, and pretty little Switzerland sometimes suffers from outsiders' fantasies that the Swiss happily spend their days making cheese, watches, chocolate, and especially money, impervious to what happens elsewhere. Banks do play an unusually important role in the Swiss economy. The Paris-based Organization for Economic Cooperation and Development estimates that banking accounts for 6.9 percent of Switzerland's gross national product, a higher proportion than in any other major country, and the business also employs a greater share of the labor force, nearly 5 percent.
The banks are a strong group: The Swiss National Bank has just announced that balance sheet totals for 1986 were up 9 percent. If the dollar had held steady during the year (Swiss banks have large dollar holdings), that would have been 15 percent.
Swiss bankers, however, share a problem with colleagues elsewhere: Financial globalization has arrived, and the outside world is stepping in.
Ironically, Swiss bankers are used to working with foreign clients, but they have until recently been somewhat protected from outside pressure by the country's fierce sense of independence and a tradition of secrecy.
That secrecy came under pressure a few years ago, but a public referendum to revise the law was soundly defeated in 1985.
Now, however, two legal changes are about to go into effect and several more are scheduled for debate in the next few months. The changes are a result of pressure from other countries and concern on the part of the Swiss that their banks may not remain competitive in a changing world financial environment.
On Oct. 1, a new code of conduct, known as the convention de diligence, will go into effect. The code is actually a legal contract between the banks and the Swiss Bankers Association to provide a framework which guarantees that banks will not abuse banking secrecy. The new code replaces one set up in 1977 after a major banking scandal.
The new agreement formalizes three banking obligations: to determine in questionable cases the ``beneficiary,'' or true owner of an account (many numbered accounts are opened by lawyers or trustees for someone else), not to provide active assistance in the flight of capital, and not to assist tax evaders.
A second change would make insider trading illegal. This statute is scheduled to become law early next year, after the two houses of parliament work out a final version, and the public has a three-month period in which to demand a referendum on it.
Bankers here deny that the affairs of former Presidents Ferdinand Marcos of the Philippines, Jean Claude (Baby Doc) Duvalier of Haiti, or the Iran-contra affair led to the tighter rules on identifying owners of accounts. They do acknowledge that their image has suffered, and the new rules are partly an attempt to mend that damage.
Certainly, the inclusion of tax evasion cases in the conduct code is a concession to other governments, since tax evasion is not a crime under Swiss law, although tax fraud is. Now, if a Swiss bank helps a client evade taxes by providing incomplete or altered records, the bank risks severe penalties.
The insider-trading law, according to Andreas Hubschmid, spokesman for the Swiss Bankers Association, ``was affected by developments in the US, but we were not under pressure from the US. We asked them to use `neutral assistance' in such cases, and now it's up to us to come up with the framework. It's really the result of the internationalization of financial markets.''
Neutral assistance means that if the United States Securities and Exchange Commission is investigating a case and wants Swiss authorities to provide information, they will, but neither the Swiss government nor the banks are under obligation to take action on their own to observe American laws. In the past, this has irritated American officials, because Switzerland had no insider-trading laws of its own.
Despite these such changes, which are linked to developments in the US, Swiss bankers' eyes are primarily focused on Europe at the moment. There is a growing sense of urgency here as the European Community takes steps to achieve a common financial market by 1992.
The Swiss, who are not members of the EC, worry they could be left out in the cold.
Laws covering at least three areas are likely to be revised in the next two years:
Company law, which protects Swiss companies from takeovers, thanks to a law regarding share ownership originally designed to prevent foreign ownership in time of war;
The tax framework for financial transactions, to change the current series of heavy stamp duties, which has driven some banking operations to London;
A broadened supervision of banks to include ``banklike institutions'' such as junk bond dealers who do not accept deposits.
Swiss banks are universal banks; that is, they can handle a multitude of jobs, such as taking deposits, issuing bonds, and selling shares, which in many other countries must be separated.
Their activities are supervised by a federal banking commission, but there is no equivalent of the SEC to watch non-banks, and the number of these has mushroomed in the past five years.
Looking at Europe, the mood of bankers is cautiously upbeat. J.P. Chapuis, secretary-general of the Bankers Association, says, ``We're fairly positive, because our financial place is used to international competition, to adapting.'' On the other hand, he adds, the Swiss have no other option.