Better outlook for Swiss banks

Ratings agency Moody's raised its appraisal of Swiss banks to stable from negative on Tuesday, citing improved earnings and a swift recovery of the Swiss economy.

“Profitability for the overall banking system has improved and is at a sustainable level,” Moody’s analyst Carola Schuler said.

Moody’s said Switzerland was among the least affected countries in Europe by the global financial crisis and expected “continued solid economic growth” and low unemployment.

In addition, Moody’s said that ongoing negotiations with key trading nations such as Germany and Britain to improve tax cooperation are positive for the banks as they “reduce some uncertainty over changes to banking secrecy rules.”

Nevertheless, it cautioned that bank secrecy changes could weigh on Swiss private banks.