A private bank, in the strict sense of the term, is a bank which is privately owned and not incorporated. The term is also used in a broader sense in reference to banks which specialize in wealth management.
In Switzerland, private banks fall under one of two categories.
- Banks classified as private bankers (German: Privatbankiers, French: banquiers privés) are genuine private banks in the true sense of the word. They are owned and funded by individual bankers who are personally liable for any financial losses.
- Other banks which are classified as private banks are typically incorporated rather than privately owned by bankers. Liability falls on the corporation rather than on an owner. They are referred to as private banks because they engage primarily in private banking (wealth management and investment advisory).
As opposed to Retail banks which serve the general public, private banks typically have high minimum capital investment requirements for customers. Some private banks also engage in investment banking and securities brokerage, though these services too are provided to select clients.
Like Swiss retail banks, Swiss private banks participate in the depositor protection scheme operated by Esisuisse. Swiss private banks are governed by the Federal Act on Banks and Savings Banks.
More on this topic:
Wealth management service comparison
