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Nervous Italians see Swiss vaults as safe haven for their cash

Reuters  |  MILAN/ZURICH 

By and Angelika Gruber

MILAN/ZURICH (Reuters) - worried about political uncertainty are looking across the border to stable as a place to park more of their wealth, asset managers say.

While Italy's anti-establishment coalition government has stressed its commitment to the euro and pledged not to impose new taxes on its citizens' wealth, a stand-off with the over budgets has left many on edge.

from Schmitz & Partner based in on the shores of Lago Maggiore has seen business pick up.

"Since early summer, many are afraid of Italy's exit from the euro," he said, referring to fears that such a move could trigger chaos.

"This is the reason why many wealthy people from northern have made the short trip to bring their money to Swiss banks and then convert from the euro into Swiss francs."

Franco Citterio, of the association in the Italian-speaking southern Swiss canton of Ticino, has also noticed the trend.

"We have noticed a certain request for information on how to open an account, on how to invest, on what are the alternatives to the euro or an Italian bond," he told "There are questions. There are visits. There is interest".

Transferring money from to is legal. It can be done electronically, so there is no need for Italians to cross the border carrying large amounts of cash, which Swiss banks could not accept anyway.

Figures from the for International Settlements show that the business Swiss banks are doing with Italian retail and private customers and companies increased by 5 percent over nine months to $13.68 billion at the end of June - around the time the current took office.

Third-quarter figures are not yet available but bankers suggest the trend identified in June may grow.

"When uncertainty is on the rise, you can see that money flows out of Italy," one senior Swiss said.

Fabio Poma, at WMM in Lugano, said some customers worried about the situation in have started to bring the money to Switzerland.

"The best security you can have right now is to transfer the money to another country," he said. "The people who are unsure have the opportunity to invest the money in other currencies. "

Italy's said last month the government was committed to remaining in the euro zone and said the government would not tax citizens' savings.

Still, Rome's clash with is making some Italians nervous. Italy imposed a one-off forced levy on savings in 1992 during a currency crisis.

The said last week that the EU was waiting for concrete and "credible" moves from Italy to revise its draft 2019 budget that is now in breach of EU rules.

One in told he decided to open a account in Lugano in October. Last year he raised 500,000 euros ($570,000) in cash by selling assets but did not reinvest it immediately. Then the populist government took power in June.

"I do not feel safe leaving all that money parked here. I want a safe exit strategy if things get worse", he said, asking not to be identified.

For banks in Switzerland, the influx is welcome. But Andrea Caraceni, of family office firm CFO SIM, said simply moving money across the border was not enough.

"If you want to insulate yourself from the Italian risk, the only form of protection is to move your residence abroad."

(Additional reporting by Elisa Anzolin, and in and in Frankfurt; Editing by Giles Elgood)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 17:21 IST