What are the Gnomes of Zurich?

By Richard Wilson AAA
A:

The "Gnomes of Zurich" is a euphemism for Swiss bankers. The name is meant as an insult because gnomes, most often found in fairy tales and legends, traditionally are regarded as secretive and greedy. And, Zurich - Switzerland's financial hub - is home to a high number of Swiss banks, which have been accused of secrecy and greed.

The popularity of the term grew in the mid-1960s when the British pound fell in value against foreign currencies. Many Britons blamed Swiss bankers for possessing significant holdings of sterling.

The phrase was made famous during the 1964 Sterling Crisis in Britain when Harold Wilson, a politician in the British Labor Party, referred to Swiss bankers and financial speculators as "Gnomes of Zurich". In his speech to the House of Commons, Wilson blamed Swiss bankers for the decline of the pound on foreign exchange markets, blasting the "Gnomes of Zurich" for harmful speculating practices.

Swiss banks are regarded highly for their rigorous security measures and client discretion. However, it is these secretive practices that contribute to the continued use of the term "Gnomes of Zurich" in reference to Swiss bankers.

For more on this topic, read Elves And Gnomes: A Fairytale World Of Investing.

This question was answered by Richard C. Wilson.

RELATED FAQS

  1. Why would you keep funds in a money market account and not a savings account?

    Read about the differences between money market accounts and savings accounts, and see why a depositor would elect a money ...
  2. What is a bank's legal liability when issuing a letter of credit?

    Learn the responsibility of banks that issue letters of credit Letters of credits ensure payment on transactions between ...
  3. When are you legally required to get a letter of credit?

    Learn how exporters or importers who deal in international trade use letters of credit to ensure that transactions are safe, ...
  4. What's the average salary of an investment banker?

    Compare average annual salaries of investment bankers based on position. Different levels of the career result in different ...
RELATED TERMS
  1. Associate In Fidelity And Surety Bonding (AFSB)

    A designation earned by bond producers, bond underwriters, and ...
  2. Associate In Insurance Services (AIS)

    A designation earned by insurance professionals and conferred ...
  3. Debit Card

    An electronic card issued by a bank which allows bank clients ...
  4. Chartered Property Casualty Underwriter (CPCU)

    A professional credential earned by individuals who specialize ...
  5. Discounted Payoff

    The repayment of a loan in an amount that is less than the principal ...
  6. Advance Dividend

    An estimate of the present value of an asset being liquidated ...

You May Also Like

Related Articles
  1. Forex

    What to Expect After the Swiss Currency ...

  2. Professionals

    Want To Be A Financial Planner? Eye ...

  3. Credit & Loans

    P2P Loans: Consider the Payoffs; Assess ...

  4. Savings

    How Foreign Transaction Fees Work

  5. Trading Strategies

    Is Goldman Sachs Still A Winner?

Trading Center