Reporting on the Swiss and Liechtenstein financial centres without getting involved in a controversy about the crisis or tax evasion is becoming something of a challenge. Nonetheless, that is what this fourth edition of BSL will attempt to do. It seeks to provide first-hand information and analysis by asking specialists to put their views.

Since our last edition, the markets have on occasion proved their ability to keep a cooler and more astute head than some would have us believe. Following the rescue of large financial institutions in several industrialised countries, they have shown a degree of optimism which many observers had not been expecting, while still maintaining the sharpness of their judgments; after all, they were not slow to point their finger at the way in which some member countries of the euro zone were allowing their public debt to slip out of control.

The first country concerned was Greece, which was at risk of no longer being able to service its debt. After the ritual denigration of speculators who were supposed to be responsible, solutions had to be found. The traditional approach would have been for Greece to negotiate debt restructuring with its creditors, who would have abandoned some of their claims. As a natural consequence, other countries also burdened with debt would have experienced difficulty in finding creditors willing to put up funds on reasonable terms and would soon have found themselves in difficulty too.

To avoid such consequences and prevent some of Greece's creditor banks based in the euro zone from being destabilised by defaults, and therefore perhaps requiring new rescue packages, the partner countries of Greece decided to come to its rescue together with the International Monetary Fund (IMF). Loans spread over three years have accordingly been approved for an amount in excess of 100 billion euros. This measure was certainly desirable to calm the markets, but has not escaped criticism, directed primarily at the IMF, whose mission is to help members who are experiencing a temporary balance of payments problem and not to refinance their public debt.

There is a great danger that this solidarity might be tested again by the markets on another occasion. In short, we are caught between a rock and a hard place. These uncertainties are compounded by doubts surrounding the new regulatory provisions on financial intermediaries which have been drawn up in various countries within the European Union and in the Basel Committee. They concern capital adequacy, liquidity requirements and risk management, in particular systemic risks, but also a limitation of the leverage effect, with no relationship to the risk incurred. Such a set of measures comes at a price which will raise the cost of banking services. Quite apart from the ban on the inclusion of bonuses in operating costs, a punitive tax is about to be introduced in several countries. It is a well-known fact that any additional costs imposed on the financial sector end up being paid by investors.

After facing attack for welcoming assets that had not been declared to their clients' national tax authorities, the financial centres of Liechtenstein and Switzerland found themselves obliged to take painful decisions: they could either remain loyal to their client base and be exposed to intolerable retaliatory measures or give in to the pressure and seek permission from their authorities to satisfy foreign demands which were incompatible with the ordinary legal process. To make sure that they were never placed in such a situation again, financial intermediaries are determined to confine their management in future to assets which they can reasonably assume to have been declared and to agree with those countries that will accept it a full withholding tax on the income of their residents' assets, granting a release from further tax liability. The development of a convincing strategy is an important step towards escaping from the deadlock.

Familiarity with the state of the financial system, the opinion of its players and the products they offer, does not remove uncertainties - they are an integral part of economic life - but does lay down important markers. Our authors attach great importance to this approach and hope to guide you with their clear, concise and objective analyses. That too is the aim of our sponsors, who have given their support to our publication year after year.