Published: 12:06 AM, 25 July 2026
Banking on Trust: What Switzerland and the World Can Teach Bangladesh
Shahidul Alam Swapan
Banks do not merely store money; they store confidence. When citizens believe their deposits are safe, loans are allocated fairly, regulators are independent and wrongdoers will be punished, banking becomes an engine of investment, employment and national progress. When that confidence collapses, even a fast-growing economy can become trapped by bad loans, capital shortages, inflation and public distrust.
This is why comparing Bangladesh with Switzerland and other major banking centres is not an academic exercise. It is a question about Bangladesh’s economic future.
The global banking landscape is extraordinarily diverse. The United States combines commercial banking, investment banking, securities markets and venture finance on a massive scale. The United Kingdom has built London into an international centre for foreign exchange, insurance and cross-border finance. Singapore has positioned itself as Asia’s leading hub for wealth management, trade finance and financial technology. Malaysia has developed one of the world’s most sophisticated Islamic-finance ecosystems. India has expanded digital payments and financial inclusion at remarkable speed.
Switzerland, meanwhile, remains synonymous with private banking, asset management, political stability and cross-border financial expertise.
Despite their differences, the strongest banking systems share several foundations: credible regulation, sufficient capital, transparent ownership, professional risk management, reliable financial reporting, enforceable laws and regulators capable of acting without political interference. The Basel Framework provides global standards covering bank capital, leverage, liquidity, credit risk and operational resilience. These standards cannot eliminate every crisis, but they create a common foundation for safer banking.
Switzerland: Trust Built Through Discipline
Switzerland’s banking reputation was not created by secrecy alone. Its deeper strengths include political stability, legal certainty, a historically strong currency, specialized financial expertise and an institutional culture that places enormous value on confidentiality, professionalism and risk management.
Swiss banks serve domestic households and businesses, but the country’s international identity rests heavily on private banking, wealth management, asset administration and services for multinational clients. Geneva and Zurich have become global financial centres because international investors generally regard Switzerland as predictable, professionally governed and legally secure.
However, the Swiss model also demonstrates that reputation must be continuously protected.
Following international controversies involving tax evasion, money laundering and undeclared foreign assets, Switzerland strengthened financial transparency, international information exchange, cross-border cooperation and anti-money-laundering controls. Banking confidentiality remains important, but it can no longer be interpreted as absolute secrecy from tax or criminal authorities.
The collapse of Credit Suisse and its emergency acquisition by UBS in 2023 also showed that even a prestigious banking centre is not immune to governance failures, liquidity pressure or a sudden loss of confidence. Switzerland’s real strength is therefore not that it avoids every crisis. Its strength lies in possessing institutions capable of responding decisively when systemic stability is threatened.
For Bangladesh, the lesson is clear: international reputation depends not on claiming that banks are safe, but on proving that regulators can identify weaknesses, disclose risks and intervene before depositors bear the cost.
The United States: Innovation, Scale and Recurring Risk
The American financial system excels in scale, innovation and access to capital. Businesses can obtain financing through commercial banks, investment banks, bonds, private equity, venture capital and public stock markets. This diversity means that companies are not entirely dependent on conventional bank loans.
American banking has financed technological innovation, global corporations, home ownership and entrepreneurial expansion. Yet the United States has also experienced repeated financial crises, including the savings-and-loan collapse, the 2008 global financial crisis and several regional-bank failures in 2023.
Its experience shows that financial innovation must be accompanied by strict supervision, stress testing, deposit insurance, liquidity planning and credible mechanisms for resolving failing institutions. It also demonstrates the importance of diversified capital markets. When productive companies can raise money outside the banking system, weaknesses in individual banks are less likely to paralyze the entire economy.
Bangladesh remains far more dependent on bank lending. Its bond market, venture-capital industry and institutional-investment ecosystem remain comparatively limited. Developing these alternatives would reduce pressure on banks and provide stronger companies with new sources of long-term finance.
Britain and the Power of a Financial Ecosystem
Britain offers another influential model. London’s strength comes not simply from the size of British banks but from the wider ecosystem surrounding them: foreign-exchange trading, insurance, asset management, legal services, accounting, fintech and international investment.
The Bank of England plays a central role in both monetary policy and financial stability, while Britain separates prudential supervision from market-conduct regulation. This helps clarify who is responsible for bank safety and who protects consumers and market integrity.
No regulatory structure is flawless. Nevertheless, clearly defined responsibilities reduce opportunities for institutions to avoid accountability an important consideration for Bangladesh, where overlapping authority and delayed enforcement have often weakened supervision.
Singapore: Regulation That Enables Innovation
Singapore has shown how a geographically small country can become a major financial centre through long-term planning. Its success rests on regulatory credibility, strong public institutions, modern infrastructure, international openness and rigorous law enforcement.
The Monetary Authority of Singapore operates as the central bank, integrated financial regulator and financial-sector development authority. This enables the country to connect monetary stability, banking supervision and technological development within a coherent policy framework.
Singapore’s fintech expansion is particularly relevant to Bangladesh. Digital banking, instant payments, electronic identification and innovative financial services are encouraged, but licensing, cybersecurity, anti-money-laundering obligations, consumer protection and operational resilience remain central.
Singapore does not regard technology as a replacement for governance. It treats technology as a powerful instrument that must function inside a trusted and regulated system.
Bangladesh has achieved considerable progress through mobile financial services. The next step must be to integrate digital banking with stronger identity verification, data privacy, fraud detection, interoperable payments and effective consumer-redress mechanisms.
India and Malaysia: Inclusion and Specialized Growth
India demonstrates the transformative power of digital public infrastructure. Digital identity, bank accounts, interoperable payments and mobile services have brought millions of people into formal finance and dramatically reduced transaction costs.
Bangladesh has developed a successful mobile-finance market of its own. However, India’s scale illustrates what becomes possible when digital identity, government services, banking and payment systems operate as a connected national ecosystem.
Malaysia offers a different lesson. Through coordinated regulation, standard-setting, professional education and product development, it has become a global leader in Islamic banking and sukuk markets.
Bangladesh has a large Islamic-banking customer base, but long-term credibility requires consistent Shariah governance, transparent profit-sharing, professional liquidity management and the same capital and risk standards expected of conventional banks. Religious branding must never become a substitute for sound banking.
Bangladesh: Impressive Reach, Dangerous Weaknesses
Bangladesh’s banking system has contributed significantly to industrialization, exports, agricultural finance, remittances, small businesses and poverty reduction. Banks helped support the expansion of garments, pharmaceuticals, manufacturing and international trade. Mobile financial services have widened financial access across both urban and rural communities.
Bangladesh therefore does not lack banking expertise, commercial energy or technological potential.
Its most serious problem is governance.
Years of connected lending, weak board accountability, politically influenced credit decisions, repeated loan rescheduling, inadequate recognition of losses and delayed legal enforcement have damaged public confidence.
The World Bank reported that Bangladesh’s non-performing-loan ratio reached 30.6 per cent in December 2025. Aggregate capital adequacy had fallen below the regulatory minimum, leaving several banks with limited ability to absorb additional losses.
The IMF has warned that delaying banking reforms could restrict credit, suppress investment, weaken growth and increase macrofinancial instability. It identified banking-sector vulnerabilities, low public revenue, inflation and weaknesses in exchange-rate management as major challenges to Bangladesh’s economic outlook.
This is not merely a problem for banks. Bad loans ultimately impose costs on depositors, taxpayers, responsible borrowers and the entire economy.
Weak banks may charge higher interest rates to compensate for losses, refuse financing to productive enterprises or survive through regulatory concessions and public support. Meanwhile, influential defaulters may repeatedly receive rescheduling facilities unavailable to ordinary borrowers.
Such a system punishes discipline while rewarding access and influence.
The Reform Bangladesh Cannot Avoid
Bangladesh now needs a reform strategy built around public trust rather than temporary crisis management.
First, Bangladesh Bank must enjoy genuine operational independence, legal protection and the authority to intervene early. A regulator cannot supervise effectively if bank inspections, loan classifications, appointments or enforcement decisions are vulnerable to political pressure.
Second, the real condition of every bank must be established through credible asset-quality reviews. Hidden losses do not disappear; they merely become more expensive.
Third, the ultimate beneficial owners of banks, companies and major borrowing groups should be disclosed. This would help regulators identify related-party transactions, concentration risks and connected lending. The World Bank has emphasized the importance of revealing links between bank owners and borrowers.
Fourth, permanently insolvent banks should not be kept alive indefinitely. Bangladesh needs a transparent bank-resolution framework permitting orderly restructuring, mergers, recapitalization or closure while protecting small depositors.
In June 2026, the World Bank approved $450 million to support Bangladesh in strengthening banking supervision, bank-resolution capacity, deposit protection and safeguards for financial stability.
Fifth, bank boards must contain genuinely independent and professionally qualified directors. Senior executives should be assessed for competence, integrity and conflicts of interest.
Sixth, wilful defaulters and fraudulent borrowers must face enforceable consequences, including restrictions on company directorships, fresh borrowing and transfers of assets designed to obstruct recovery.
Seventh, state-owned banks require explicit commercial mandates, measurable performance standards and public accountability. They should not function as permanent channels for politically directed lending.
Eighth, financial courts and specialized tribunals need faster procedures, digital case management and stronger enforcement powers.
Ninth, Bangladesh should deepen its bond, equity, pension-fund and venture-capital markets so that national investment is not overwhelmingly dependent on banks.
Tenth, digital banking must advance alongside cybersecurity, data privacy, fraud prevention and customer protection.
Eleventh, Islamic banks require a unified, credible and independently supervised Shariah-governance framework.
Finally, Bangladesh Bank should publish clear and regular information on capital adequacy, liquidity, related-party exposure, non-performing loans and enforcement actions. Markets function better when risks are visible.
A Choice Between Privilege and Professionalism
Bangladesh does not need to copy Switzerland, Singapore, America or any other country mechanically. Their histories, economies and political institutions are different.
However, Bangladesh can adopt the principles that make their banking systems resilient: regulatory independence, transparent ownership, rapid recognition of losses, professional boards, diversified financing, credible resolution rules and equal treatment under the law.
Switzerland shows that trust can become a national economic asset. America demonstrates the power of diversified capital markets. Britain reveals the value of a complete financial ecosystem. Singapore proves that rigorous regulation and technological innovation can reinforce each other. India illustrates the extraordinary scale of digital inclusion, while Malaysia shows how specialised banking can become globally competitive.
Bangladesh already possesses the entrepreneurs, depositors, technology and human talent required for a modern financial system. What it lacks is not potential but consistent enforcement.
Reform will undoubtedly be politically difficult and financially costly. Yet postponement will cost far more. A banking system may survive temporary losses, but it cannot prosper without public confidence.
Bangladesh’s most important financial investment is therefore not another bank, another licence or another rescue package.
It is the restoration of trust.
Shahidul Alam Swapan is a
financial expert and an
author based in Switzerland.
