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. What are the requirements that a trust needs to meet to be qualified?

    The requirements that a trust must meet to be qualified are as follows: The trust must be a valid trust under state law or ...
  2. What does the Daily Average Revenue Trade (DART) tell me about a brokerage?

    A decline in a brokerage firm’s DARTs is not necessarily a cause for alarm, but you need to understand the factors behind ...
  3. What's a better way to borrow money: overdraft or credit cards?

    Overdraft and credit cards will allow you to spend more money than you have, but whichever option you choose, be sure to ...
  4. What are the pros and cons of overdraft protection?

    If you sign up for overdraft protection and link your checking account to your savings account, a credit card or an overdraft ...
RELATED TERMS
  1. Comprehensive Automated Risk Data System (CARDS)

    The Comprehensive Automated Risk Data System (CARDS) is an initiative ...
  2. LIBOR Scandal

    A scandal in which financial institutions were accused of fixing ...
  3. Average Revenue Per User (ARPU)

    A measure of how much income a business generates, given the ...
  4. Money Market Account

    An interest-bearing account that typically pays a higher interest ...
  5. Float

    Money in the banking system that is briefly counted twice due ...
  6. Capital Buffer

    Mandatory capital that financial institutions are required to ...
comments powered by Disqus
Related Articles
  1. Bag The Best Bank Account
    Insurance

    Bag The Best Bank Account

  2. Tired Of Banks? Try A Credit Union
    Retirement

    Tired Of Banks? Try A Credit Union

  3. Texas Ratio Rounds Up Bank Failures
    Personal Finance

    Texas Ratio Rounds Up Bank Failures

  4. Introduction To Financial Planning Organizations
    Personal Finance

    Introduction To Financial Planning Organizations

  5. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

Trading Center